Spx option last trading day
The VIX provides a 30 day expectation of volatility. The options have a unique expiration. For technical reasons they must expire exactly 30 days before an SPX options expiration date. There can now be up to five consecutive Weeklys, expiring on future Fridays that do not coincide with monthly or quarterly expirations that already exist. Same-day settlement has finally arrived, forty years after options began trading. Theoretically, the value of an option that expires at any given second in the future can be calculated.
Kind of like the difference between waiting on the corner for a bus that runs once a week, vs. Continuously available options are really only a few small steps from what happens now. When I sell an option short, I conjure it from thin air and sell it to someone.
Later, when I buy to close out that position, that option contract is destroyed. It could just as well expire at 2: If I wanted to sell one, all that would be needed is someone who happens to want to buy an option that expires at 2: That is actually no obstacle either.
The other party to most trades that you or I, or any option trader makes is an option market maker, not another actual trader. Disclaimer This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever.
Trading and Investing involves high levels of risk. Broad-based indexes have many different industries represented by their component companies. As you would expect, however, other broad-based indexes are indeed made up of many different stocks.
When stock options are exercised, the underlying stock is required to change hands. But index options are settle in cash instead. That would be ridiculous. The index value is just a gauge to determine how much the option is worth at any given time. As of this writing, all stock options have American-style exercise, meaning they can be exercised at any point before expiration. Most index options, on the other hand, have European-style exercise. As with any other option, you can buy or sell to close your position at any time throughout the life of the contract.
The last day to trade stock options is the third Friday of the month, and settlement is determined on Saturday. The last day to trade index options is usually the Thursday before the third Friday of the month, followed by determination of the settlement value on Friday. The settlement value is then compared to the strike price of the option to see how much, if any, cash will change hands between the option buyer and seller.
Stock options and narrow-based index options stop trading at 4: If a piece of news came out immediately after the stock market close, it might have a significant impact on the value of stock options and narrow-based index options. However, since there are so many different sectors in broad-based indexes, this is not so much of a concern. All of these are very general characteristics of indexes. In practice, there are lots of small exceptions to these general rules.
Although the OEX is an index, options traded on it have American-style exercise. This table highlights a few of the general differences between index options and stock options. But make sure you do your homework before trading any index option so you know the type of settlement and the settlement date.
As you read through the plays, you probably noticed that I mentioned indexes are popular for neutral-based trades like condors. Options involve risk and are not suitable for all investors. For more information, please review the Characteristics and Risks of Standardized Options brochure before you begin trading options.