Index Option
An option on a stock index, usually the Standard & Poor's 500. Basically, these are a way to bet on the direction of the market. They can also be used to hedge against risk. Options on market-sector indexes are also available.
Index Options Put/Call Ratio
This indicator is calculated by dividing the weekly volume of S&P 100 call options by the weekly volume of S&P 100 put options. Big call volume appears at market tops and big put volume at bottoms.
A Stock index option issued by either a corporate or a sovereign entity as part of a security offering, and guaranteed by an option clearing corporation.
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Index Option A call or put option on a financial index.
Immediate or Cancel Order An order requiring that all or part of the order be fullfilled immediately. Any portions of the order not compeleted are canceled.
Index Options: An Introduction
Basic Strategies
The versatility of index options stems from the variety of strategies available to the investor. The most basic uses of index options are explained in the following examples.
Index Option
An option whose underlying entity is an index. Most index options are cash-based ...
Index option
An agreement that gives an investor the right, but not the obligation, to buy or sell the basket of stocks represented by a stock-market index at a specific price on or before a specific date.
Index option
A call or put option based on a stock market index.
Index and Option Market (IOM)
A division of the CME established in 1982 for trading stock index products and options.
Index Options: Call options and put options on indexes of stocks designed to reflect and fluctuate with market conditions.
Amex Index Options
The American Stock Exchange was one of the pioneers in index options and today trades put and call options on broad market, industry sector and international indices.
Amex Index Options: The American Stock Exchange trades put and call options based on a number of sector, industry and international indices.
Stock Index Option - An option in which the underlying security is a common-stock index.
Stock Index Swap - A swap involving a stock index.
Index Options Trading Systems
Find how to generate monthly revenue yielding 15-20% yearly at almost no risk. Includes our proprietary Index Trading System with FREE trading signals on SP500 ND100 (QQQQ) and DOW with 80% accuracy.
Index Option
Please select a term from the left to see the corresponding definition.
Index Option
Call and put option contracts traded on an underlying index, such as the S & P 100, and not a specific security.
INDEX OPTIONS
Calls and puts on stock or bond indexes. Index options allow investors to trade a particular market sector or index of securities, without having to make individual purchases of each security in that sector.
Trading Index Options by James B. Bittman
Buying and Selling Volatility by Kevin Connolly
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Equity and Index Option Strategy Selection
Option Fundamentals and Pricing
Simulated Position Analysis
CBOE Product Information and Reference Tools ...
For equity and index options and future options setups, the Advanced section of the window show has and entry box for viewing and editing the strike price of the option and radio buttons for specifying whether the option is a put or a call.
Stock index option An option in which the underlying is a common stock index. Stock market Also called the equity market, the market for trading equities.
Related: Deterministic models Stock index option An option in which the underlying is a common stock index. Stock market Also called the equity market, the market for trading equities.
Stock Options and Index Options, an Illustrated Introduction with Examples.
Option Strategies-Investment Strategies using Options, illustrated with graphs and examples.
An exchange where stock options, equity LEAPS, index options, and interest rate options are traded. Chicago Mercantile Exchange Abbreviated as CME. An exchange where financial futures, foreign currency futures,...
An Equity Index Option (q.v.) has a payoff that depends on the average of underlying share prices. Pricing: Margrabe (1976) published the first pricing model for a Rainbow Option, namely the "Margrabe Option.
Cash Settlement Typically associated with index options, this is the process through which option holders receive the intrinsic value of the options in cash at expiration. In this case, option sellers are responsible for cash payment.
For numerous market participants around the world, various index derivatives - such as index options and futures on indexes - have become highly popular trading tools.
Options in the securities industry includes stock options, index options, foreign currency options and options on futures.
Long/short equity (Equity hedge) - long equity positions hedged with short sales of stocks or stock market index options.
Emerging markets - specialized in emerging markets, such as China, India etc.
The $VIX is the 30-day annualized implied volatility of the S&P 500 Index Options. In addition, the $VXN is the 30-day annualized implied volatility of the Nasdaq 100 Index Options.
VIX is the ticker symbol for the Chicago Board Options Exchange Market Volatility Index, a popular measure of the implied volatility of S&P 500 index options.
In the late 1970s, while trading warrants and options and in the early 1980s, when index option trading started, I focused on volatility as the key variable. To volatility, then, I turned again to create my own approach to trading bands.
The VIX is calculated using the implied volatility of a weighted range of S&P 500 Index options.
It's actually when single stock options, stock index options, and stock index futures contracts all expire at once. In the United States it's from 3 PM to 4 PM New York time on the third Friday of March, June, September, and December.
At present, the VIX is more commonly used to monitor the implied volatility of the Standard and Poor’s 500 Index Options.
When you're dealing with index options, you'll often see more puts trade than calls because institutions typically use them to hedge long positions and thus tend to buy more puts as protection from a sudden drop.
When you start dealing in equity or index options, the position changes.
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The simultaneous expiration of stock option and index option contracts, which may create market volatility. Occurs on the third Friday of the month, excluding March, June, September and December.
Index options are one example of an underlier that cannot be delivered. Futures options are also often employed as an underlier.
Minimum maintenance requirement for index options (narrow index) is the premium plus 20% of the current market value less the amount it is out of the money; or the premium plus 10% of its current market value.
Double diagonals are a favorite among professional index option traders.The double diagonal capitalizes perfectly on the moderate range of the index versus singular components by ...
Dow Jones Industrial Average ...
Four times a year the stock futures and, market index options, stock options and, market index futures all come to a cutoff point.
FLEX Options
Exchange traded equity or index options, where the investor can specify within certain limits, the terms of the options, such as exercise price, expiration date, exercise type, and settlement calculation.
Section 1256 is defined by the IRS as any regulated futures contract, foreign currency contract or non-equity option, including debt options, commodity futures options and broad-based stock index options.
The computation of the value of VIX is based on the implied volatility of a wide range of S&P 500 index options, and it's quoted in percentage points per year.
For example, many index options listed on various US exchanges are European-style options. In contrast, you can exercise an American-style option at any point between the day you purchase it and its expiration date.
Quadruple Witching - The third Friday of March, June, September and December when Index Futures, Index Options, Stock Futures and Stock Options expire.
The date marks the simultaneous expiration of stock options, index futures and index options.
If the option is cash settled (i.e. most index options) then no asset is transferred.
The event happens on the third Friday in March, June, September and December when options, index options, single stock futures and index futures all expire on the same date.
Optioned-up Portfolios is an advisory service that sends buy and sell signals for S&P 500 (XSP) index option contracts. Visit for detailed trading results and free trial
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Triple Witching Hour Slang used for the last hour of trading before the simultaneous expiration of stock options, index options, and index futures. This occurs four times a year on the third Friday of each quarter's end.
The bulk of trading on AMEX consists of index options (computer technology index, institutional index, major market index) and shares of small to medium-sized companies are predominant. Recently merged with Nasdaq ...
Cap Interval: The point at which these special index options are automatically exercised if the underlying index touches or exceeds the cap price on the close.
Portfolio Insurance: A trading strategy that uses stock index futures and/or stock index options to protect stock portfolios against market declines.
Triple Witching Hour: Term for the simultaneous expiration each quarter of stock-index futures, options on individual stocks, and stock-index options.
LEAPS: Abbreviation for Long-term Equity Anticipation Securities. These are are long-term stock or index options whose expirations dates are available for up to three years in the future.
Shows the market's expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge".
VIX Volatility Index - Is High VIX Value Suggesting The Bull Market Is Over?
CBOE VIX Volatility Index is a measure of investors fear, measuring expected volatility of S&P 500 index options and is an interesting indicator of where the market is ...
As the S&P 500 options are the most liquid index options on the CBOE, VIX provides a measure of implied volatility for the broader market. In addition, VIX can be used in any timeframe as the CBOE updates VIX throughout the day.
 See also: Option, Options, Index, Stock, Market
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