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S&P 100 Investing & Trading System
S&P 100 Index Options & Futures Trading
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.
Index options on the S&P 100 are traded
with the ticker symbol "OEX". Because of the popularity of these options,
investors often refer to the index by its ticker.
S&P 100 Index Options Contracts & Futures Trading 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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