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Index Derivatives - S&P 100 Stock
Stock Market Investing &
Trading System

S&P 100 Index options bring an added dimension to stock market investing by giving you the ability to trade and invest on an entirely different level. Instead of requiring you to focus on specific stocks, S&P 100 Index options allow you to trade a large segment of the domestic stock market with a single transaction.

Exchange Traded Funds (ETFs) & iShares, Options & Futures Trading / Futures Contracts

Securities Issuer Type Symbol / Root
S&P 100 Index Options CBOE Options OEX
OEX -(Reduced-Value) LEAPS CBOE Options OEX
XEuropean-style S&P 100 Index Options CBOE Options XEO
XEuropean-style S&P 100 LEAPS CBOE Options XEO
Options on iSharesSM CBOE Options OEF

S&P 100 Index Options Contracts
To provide investors with added flexibility in managing large-cap U.S. equity exposure, a number of S&P 100 options are now offered:

  • Since 1983 investors have used, cash-settled S&P 100 options (ticker symbol OEX, with American-style exercise) to adjust their equity portfolio exposure. More than one billion OEX options have been traded, making the OEX one of the most popular equity portfolio management tools in history.
     
  • In February 2001 options on iShares S&P 100 (ticker symbol OEF, with American-style exercise) were introduced.
     
  • In July 2001 the CBOE has introduced cash-settled S&P 100 options (ticker symbol XEO) with European-style exercise. Some investors prefer this European-style feature, which means that XEO may be exercised only on the day just prior to expiration, and therefore XEO is not subject to the uncertainties involved with possible early exercise.
     
  • Investors wishing to manage long-term exposure can use 1/5 value OEX LEAPS or full-value XEO LEAPS.

Bullish, bearish, and neutral investors can all use S&P 100 options to reflect their individual opinions of the S&P 100 market. You can trade index options for profit or protection, with opportunities to adjust for up, down or unchanging markets. The S&P 100 has established itself firmly as an active investment tool. This popularity stems from four fundamental reasons for using the broad market-based S&P 100:

Simplicity
Investors are able to trade a broad market by making one S&P 100 trading decision rather than making the many decisions involved with investing in numerous individual stocks.

Insurance
S&P 100 options offer a convenient and easy way to reduce the market risk of a broad market portfolio, without disrupting the make-up of the portfolio.

Predetermined Risk
S&P 100 option purchasers risk only the premium they pay for the option. The risk is both known and limited.

Leverage
Purchasing S&P 100 options, instead of buying or selling numerous individual stocks, provides an investor with an additional opportunity to use investment capital elsewhere. For a relatively small percentage gain in the underlying index, an S&P 100 option can increase in value by a multiple of that gain, assuming the correct option series was selected.


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