S&P500 Options expiring on last trading day of the month

Discussion in 'Options' started by ChrisM, Mar 21, 2006.

  1. ChrisM


  2. ChrisM


    As I trade solely index options I know that european style are:

    SPX, ES, XEO, RUT, XSP but thiese are all I know at the moment.
  3. Quotes from the article.

    “Based on customer demand, CME continues to deliver on our growth strategy through new product offerings like end-of-month options in order to increase trading in our equity index options on futures markets...."

    "Under European-style rules, options holders are allowed to exercise their contract only on the date of expiration vs. American style which can be exercised into a futures position at any time prior to expiration. "

    I dunno, this reminds me of our measuring system.
    They couldn't learn fractions, so many of our items are now metric.
    I've seen it in aviation weather reporting, too.
    Let them learn our system.
    I realize many people are resistant to change, and I admit to being one of them.
    Looks like another step towards the NWO.

    Sometimes change is good.
    Sometimes there is change just for the sake of change.

    I hear talk of changing the opening of the NYSE to accommodate
    the west coast.
  4. The ES options are American style as are most of the options on futures.

    Here is a CME publication that towards the middle has all the contract specifications for options on futures:

    http://www.cme.com/files/EquityIndexManual .pdf

  5. ChrisM


  6. The below is from the CME website on E-mini S&P options:

    CME E-mini S&P 500 Futures and Options Contract Highlights*



    CONTRACT SIZE One CME E-mini S&P 500 futures contract

    STRIKE PRICES 5-point intervals for two nearest contracts,
    10-point intervals for deferred months

    POSITION LIMITS Position limits work in conjunction with
    existing CME S&P 500 position limits

    QUARTERLY FUTURES AND OPTIONS SETTLEMENT PROCEDURES: Cash settlement. All open positions at the close of the final trading day are settled in cash to the Special
    Opening Quotation (see Special Opening Quotations) on Friday morning of the S&P 500 Index.

    OPTION EXERCISE: American Style. An option can be exercised until 7:00 p.m. (Chicago time) on any business day the option is traded. An option that is in-the-money, and
    has not been exercised prior to the termination of trading shall, in the absence of contrary instructions, be delivered to CME Clearing by 7:00 p.m. on the day of determination
    of the Final Settlement Price, and be automatically exercised.
    *Please refer to CME Rules for official specifications.

    I have to take CME's word for it since they are the exchange unless IB knows something I do not. All the options on futures at CME indicate American exercise so I cannot imagine the ES would be different.
  7. ChrisM



    I`ve seen it. And I don`t think IB would put such massive misinformation neither.

    I`ll try to clarify this with IB and let you know.
  8. Easiest way to find out.... sell a deep ITM ES option and see if you get assigned early


  9. ktm


    I have some questions. I should probably call the CME, but I'll pitch a few queries here for anyone who knows.

    Are the big contracts going to be traded on Globex during the day? If so, this would seem to circumvent the pit.

    These are in addition to - and not replacing - the standard expiration contracts?

    #10     Mar 21, 2006