Hello. Thanks in advance for reading and hopefully helping me out. Very simply question: If I wanted to buy a straddle quoted at 235.90, what would that cost me? I know for equity options it is for a block of 100 shares, but I am unsure of the contract size for an index. Regards.
CBOE site has lots of information for you: http://www.cboe.com/Products/indexopts/spx_spec.aspx The multiplier is 100 for SPX so your straddle would cost $100 times the quote you see on the screen. Yours would be $23,590 for a one lot if your quote is right. The only straddles in the SPX at that price though are way in the money or really far leaps, neither of which I would recommend for a new trader. One of things most newbies fail to realize is that you will learn a lot more buying a straddle and scalping your gamma than you ever will selling an iron condor and sitting back and praying you are right. To do that though you would want to use the SPY or ES futures, not the SPX.