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 OEX Options (S&P 100 index)

OEX is the ticker symbol for the S&P 100 Index (“Standard and Poors S&P 100 Stock Index”). OEX options allow traders to speculate on the movement of the OEX. The OEX consists of 100 blue-chip stocks from diverse industry groups - they provide a good measure of the market’s overall performance. The OEX is a subset of the S&P 500 index; the OEX is based on 100 of the 500 stocks of the S&P 500. OEX issues are not equally weighted - the larger a stock, the greater its influence on the total index.

Investors have been using OEX options (with American-style exercise) since 1983. More than one billion OEX options have been traded since then, making the OEX one of the most popular equity portfolio management tools in history.

In February 2001, options on iShares(SM) S&P 100 (ticker symbol OEF), with American-style exercise, were introduced.

In July 2001, the CBOE introduced S&P 100 options with European-style exercise (ticker symbol XEO)

OEX options are popular for several reasons:

• Investors can trade OEX options rather than analyzing and investing in the numerous individual stocks of the S&P 100 index. This reduces the number of trading decisions greatly;
  
• Purchasing S&P 100 options is less risky than buying and selling numerous individual stocks;
  
• Trading OEX options requires less capital than trading the options of individual stocks.

 

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