Cboe Global Markets

FLEX® Options

Customized Tools for Portfolio Management

Launched in 1993, FLexible EXchange® Options (FLEX Options) are powerful, customizable portfolio management tools that allow users to specify key contract terms, including exercise prices, exercise styles, and expiration dates, on major stock indexes (SPX®, XSP, RUT, DJX, MXEA, and MXEF) as well as individual equities.

Benefits of FLEX Options

Customize Contract Terms
Set key terms, including exercise price and style as well as expiration dates
Reduced Counter-Party Risk
Trades cleared by Options Clearing Corporation, which significantly reduces counter-party risk
Transparency and Ease
Price discovery in competitive auction markets; execute orders via FIX/API interfaces or Cboe Silexx
Capital Efficiency
Availability of cross-margining allows for greater capital efficiency

New—FLEX Delta Adjusted at Close Order Type

Delta Adjusted at Close (DAC) is an innovative order type for options users, like issuers of defined outcome and buffer-protect ETFs, who seek to exactly align the execution price of their option strategies with the closing price of the underlying. With the DAC order type, the Exchange automatically adjusts the initial execution price upon receipt of the official closing price of the underlying security or index from the primary listing exchange or index provider, respectively. The price adjustment is based on delta and the change between the underlying reference price and closing price. DAC is available for FLEX ETF/ETP/ETN and index option products any time during Cboe's regular trading hours session.

The Flexibility to Name Your Terms

FLEX Options provide versatility to virtually every option strategy and precision to target trading objectives.

Please note: The Exchange may approve and open for trading any FLEX options series on any index, equity, ETF, or ETN that is eligible for Non-FLEX options trading in accordance with the Exchange's listing criteria, even if there are no Non-FLEX options on such listed on the Exchange. These include, but are not limited to, the following:

Index FLEX Equity FLEX
Options Available for FLEX Trading
  • S&P 500 (standard and mini XSP)
  • Russell 2000 (RUT)
  • MSCI Emerging Markets (MXEF)
  • DJIA (DJX)
  • Nasdaq-100 (NDX)
FLEX trading available for all Cboe-listed equity options
Expiration Date Up to 15 years from the trade date Up to 15 years from the trade date
Option Type Put or Call Put or Call
Exercise Style American or European American or European
Strike Price Index value, percent of index value or other methods A dollar amount, percent of stock price or other methods
Premium Percentage of the level of the underlying index or specific dollar amount per contract or contingent on specified factors in other related markets A dollar amount, percent of the stock
Trading Hours 8:30 a.m. to 3:15 p.m. Chicago Time Equity FLEX trading hours are 8:30 a.m. - 3:00 p.m. Chicago time. For trading hours on FLEX options on ETPs, please refer to the contract specifications.
Position Limits Please refer to Cboe Rules 24A.7 and 24B.7 for complete information regarding Index FLEX position limits Please refer to Cboe Rules 24A.7 and 24B.7 for complete information regarding EquityFLEX position limits
Exercise Settlement All Index FLEX options are either AM or PM settled, subject to certain conditions described in the rules. Please refer to Cboe Rules 24A.4 and 24B.4 for complete information regarding settlement types All Equity FLEX options are PM settled

FLEX Options vs OTC Execution

FLEX options combine the customization of Over-The-Counter (OTC) options with the ease and guarantees of listed options.

Virtually No Counter-Party Risk | Capital Efficiency with Cross Margining | Operational Ease

Asian & Cliquet FLEX Index Options

Asian and Cliquet FLEX Index options were developed to assist insurance companies with their hedging needs. Many insurance companies issue indexed annuity products where annuitants are provided with upside market exposure. This upside exposure is provided through various types of crediting methods. These crediting methods are nothing more than different types of options embedded within the annuities.

Two popular crediting methods employed by insurance companies are Asian options and Cliquet options. Asian options are also known as averaging options - their settlement price is determined by averaging a pre-set number of closing index values. Cboe offers a specific type of Cliquet option known as the monthly sum cap with a global floor where the payoff is the greater of zero or the sum of the monthly capped returns over the course of a year.

Prior to the listing of Asian and Cliquet options at Cboe, insurance companies hedged these exposures in the over-the-counter (OTC) market. Cboe's Asian & Cliquet FLEX Index Options offer insurance companies the customizable features traditionally associated with the OTC market along with the hallmarks of exchange trading like transparency, centralized clearing, and price discovery.

Asian and Cliquet Index FLEX Options Quick Reference Guide

Strategies that Employ FLEX Options

Cboe offers dozens of benchmark indexes designed to show the hypothetical performance of strategies that use FLEX options. Following are two examples from our Target Outcome Index Series that use S&P 500 Index FLEX options.

Cboe S&P 500 Buffer Protect Index Balanced Series (SPRO)

SPRO is a balanced composite index comprising the 12 monthly indexes in the Cboe S&P 500 Buffer Protect Index Series. SPRO is designed to track the returns of a hypothetical investment that, over a period of approximately one year, seeks to “buffer protect” against the first 10% of losses due to a decline in the S&P 500 Index while providing participation up to a capped level. Since inception, SPRO has had significantly lower volatility than the S&P 500 as demonstrated by standard deviation.

Drawdown Performance of Cboe S&P 500 Buffer Protect Index Series vs. S&P 500

Cboe S&P 500 Enhanced Growth Index Balanced Series (SPEN)

SPEN is a balanced composite index comprising the 12 monthly indexes in the Cboe S&P 500 Enhanced Growth Index Series. SPEN is designed to track the returns of a hypothetical investment that, over a period of approximately one year, seeks to provide 2x enhanced returns on the appreciation of the S&P 500 Index up to a capped level while providing one-to-one exposure to any losses. Since inception, SPEN outperformed both large cap domestic and international equities.

Trading FLEX Options on Cboe Silexx OEMS

Silexx is Cboe's proprietary front-end offering for trading FLEX options on Cboe Options Exchange. Silexx FLEX option functionality includes:

  • All Cboe Exchange functionality
  • Direct market access for electronic execution
  • Routing directly to a floor broker for open-outcry execution
  • Spreadsheet import for efficiency
  • Risk controls defined and managed by firm-designed risk administrator