Benefits of DJX Index Options
- Cash Settled
- Trading account is credited/debited in cash, not ETF shares
- European Exercise
- No risk of early assignment
- 60/40 Tax Treatment
- Capital gains may benefit from 60/40 tax treatment*
Historical Performance for DJX Index Options
Trading DJX Index Options
The DJX index option contract is based on 1/100th (one-one-hundredth) of the current value of the Dow Jones Industrial Average. So, for example, when DJIA is at 11,000, the DJX level will be 110. The DJIA - the index on which the DJX contracts are based - is the oldest (established 1896) continuing U.S. market index, and the DJIA probably is the world's best known stock index to individual investors. Options on the Dow are available from 8:30 a.m. to 3:15 p.m. CT.
Since their introduction in 1997, DJX options have grown to become some of the most popular index options worldwide.
*Under section 1256 of the Tax Code, profit and loss on transactions in certain exchange-traded options, including DJX, are entitled to be taxed at a rate equal to 60% long-term and 40% short-term capital gain or loss, provided that the investor involved and the strategy employed satisfy the criteria of the Tax Code. Investors should consult with their tax advisors to determine how the profit and loss on any particular option strategy will be taxed. Tax laws and regulations change from time to time and may be subject to varying interpretations.