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S&P 100 Index Derivatives
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.
- Related Links:
-
Options Trading - hundreds of articles and other resources
related to the options trading that may guide you through the process of the
learnig.
-
S&P 100 Quotes - S&P 100 and Russell 3000 quotes, charts, technical
studies from the world leader of the volume based technical analysis
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SPY Options - SPY
uncovered options trading signals. Learn how to invest into the uncovered
options conservatively.
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