Benefits of MSCI EAFE and Emerging Markets Index Options
- Large Contract Size
- MXEA and MXEF options have large notional size - approximately 25 to 30 times the size of comparable ETF 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 MSCI EAFE, MSCI Emerging Markets, and S&P 500
Trading MSCI Options
The MSCI EAFE® (ticker MXEA) and MSCI Emerging Markets (ticker MXEF) indices are leading benchmarks for tracking large- and mid-cap developed and emerging market equity performance outside of North America, respectively.
Trading in expiring MXEA and MXEF options ends at 4:15 p.m. (Eastern time) on the business day (usually a Thursday) preceding their expiration date.
Comparison of MSCI Options Products
| MSCI EAFE® Index Options | iShares® MSCI EAFE ETF | |
|---|---|---|
| Options Chain | MXEA | EFA |
| Root Ticker Symbol | MXEA | EFA |
| AM or PM Settlement | PM-settled | PM-settled |
| Approximate Notional Size | ||
| Exercise Style | European | American |
| Settlement Type | Cash | Physical Shares of ETF |
| MSCI Emerging Markets Index | iShares® MSCI EEM ETF | |
|---|---|---|
| Options Chain | MXEF | EEM |
| Root Ticker Symbol | MXEF | EEM |
| AM or PM Settlement | PM-settled | PM-settled |
| Approximate Notional Size | ||
| Exercise Style | European | American |
| Settlement Type | Cash | Physical Shares of ETF |
Cboe MSCI Options Strategy Benchmark Indices
Strategy benchmarks provide investors with a measure of the relative performance of MSCI EAFE and Emerging Markets Index-based options strategies over time.
Select Research
Wilshire
Improving Diversification by Harvesting Premiums & Cushioning Risk: Cboe MSCI Option Benchmark Analysis
*Under section 1256 of the Tax Code, profit and loss on transactions in certain exchange-traded options, including MSCI, 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.