CHICAGO, Sept. 13, 2011 /PRNewswire/ -- CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that it will begin trading SPXpm, its new S&P 500 Index options product, on Tuesday, October 4. SPXpm options will be traded on the Company's all-electronic C2 Options Exchange (C2).
C2's SPXpm product is a cash-settled index option based on the S&P 500 Index, the premier benchmark of the broader U.S. market. SPXpm is similar in structure to the Chicago Board Options Exchange's (CBOE) flagship S&P 500 SPX contract, the most-actively-traded U.S. index option product, except it has "p.m." settlement.
"We are pleased to announce a launch date for what we believe will be another major product for CBOE Holdings," said CBOE Holdings Chairman and Chief Executive Officer William J. Brodsky. "In designing an electronic compliment to our flagship SPX option, we worked closely with customers to create the "best in class" among electronically traded S&P 500 products. The result is a product tailored to provide point-and-click access to the S&P 500 Index, with greater efficiency, greater control and lower costs."
One SPXpm option contract is ten times larger than one SPDR ETF options contract (SPY), significantly lowering the cost of accessing a p.m.-settled S&P 500 contract. The new contract also features the ease of cash settlement, as opposed to physical settlement in ETF options. Finally, SPXpm uses European exercise, which eliminates the risk of early assignment.
SPXpm should appeal to a diverse group of customers including active traders, high-net-worth investors, retail online users and high frequency traders. OTC participants may use SPXpm as an exchange-traded alternative that eliminates counterparty risk.
With SPXpm's launch on C2, trading alongside SPX on CBOE, customers will have two very deep pools of liquidity in which to trade S&P 500 cash index options — one that favors the convenience of screen trading, and one that provides the flexibility afforded by floor trading to negotiate large, complex orders.
SPXpm Contract Specifications:
- Symbol: SPXpm
- Settlement: PM-settled, European style exercise
- Multiplier: $100
- Premium Quote: Stated in decimals. One point equals $100. Minimum tick for options trading below 3.00 is 0.05 ($5.00) and for all other series, 0.10 ($10.00).
- Strike Price Intervals: The minimum interval for SPXpm options shall be no less than five points.
- Expiration Months: Up to twelve near-term contracts. LEAPS may also be listed.
Expiration Date: Saturday following the third Friday of the expiration month.
- Last Trading Day: Trading in SPXpm options will ordinarily cease on the business day (usually a Friday) preceding the expiration date.
- Trading Hours: 8:30 a.m. to 3:15 p.m. (CT)
A complete overview of SPXpm can be found at: http://www.cboe.com/SPXpm.