Supersized SPY options coming!!!

Discussion in 'Options' started by KINGOFSHORTS, Mar 13, 2012.

  1. 10x This will be real nice. 1 car vs 10 Hopefully this will be available soon.

    BOCA RATON, Fla. (Dow Jones)--The International Securities Exchange on Tuesday unveiled plans for new, larger-sized options contracts linked to the exchange-traded fund tracking the S&P 500, stepping up its challenge to sector leader CBOE Holdings Inc. (CBOE).

    The ISE filed plans with regulators to list options contracts on the ISE Max SPY Index, a proprietary measure that represents 10 times the value of the SPDR S&P 500 ETF Trust (SPY), as the options exchange operators battle for trade in contracts used to speculate on major stock-market shifts.

    The planned contracts are similar in size and design to a new slate of electronically traded options rolled out last fall by the parent of the Chicago Board Options Exchange, which maintains exclusive rights to trade options on the S&P 500 stock index. Those contracts are CBOE's most popular products and remain traded mostly on the exchange's Chicago-based floor.

    A new version of those options, called SPXpm, debuted last fall on CBOE's new electronic exchange C2, which is oriented toward automated trading firms and formulated to be different from the floor-traded version.

    A larger-sized version of the SPY contract to be offered by ISE aims to capture rising interest in options trading among financial institutions, as well as the established use of options on the SPDR ETF.

    The ISE estimated that so-called SPY options are the most heavily traded options in the U.S., with more than 2 million changing hands per day so far this year.
  2. 489


    Interesting, but lots of products (including SPXpm) have tried to serve as a proxy for SPX without success.
  3. You do realize there are options on SPX that have the same value, and they've been around for years? Ditto for RUT by the way, analogously to IWM.
    This is gimmicky marketing, nothing else.
  4. rew


    I can already buy options on SPY, SPX, and on S&P 500 futures. Just how many more ways do I need to make essentially the same trade?

  5. hopefully this will include weeklies.

    Is there much volume in the SPX weeklies? How is the spread compared to SPY these days?

    One thing about SPY. I wish they would go to cash settled vs physical.
  6. There's some solid volume in the SPX weeklies unless you're some huge player who trades over 1000 contracts/day (doubtful but hey never know - see the attached montage). Spread, amigo, on SPX weeklies is still wider than its ETF counterpart. Unfortunately CBOE hasn't released a date (or even plans) when they will unveil SPXpm weeklies which I eagerly await. Honestly the tighter markets on SPXpm via C2 plus PM expiration are two advantages I truly enjoy (hated waiting the entire day for that blessed settlement number).

    Keep dreamin with SPY being cash settled, If I remember correctly, all cash settled are european options (save OEX) and track an index which TECHNICALLY does not trade. Of course you can delta hedge using the smaller ETF baskets but to reiterate don't bet your last dollar on the cash settlement for SPY.
  7. FSU


    Dont think they will have SPXPM weekly options, as the SPX weeklies are exactly the same thing. Both are settled based on the afternoon closing price of the SPX.

    In terms of market width, since the SPX is 10 times the size of the SPY's a .20 wide market in the SPX weekly is equal to a .02 wide market in the SPY options. So I would say the market width is about the same.
  8. bc1


    Yep, there are no quotes or markets for the spxpm on a weekly basis. Just a monthly option for spxpm.

    What is confusing is that the SPX weekly and quarterly are a pm settled option. I trade the spx weekly all day friday as well. But when the spx falls on the same time as the monthly, it changes to an AM settled option like the RUT and others. I'm not sure of the logic in this unless they were originally wanting to compete with the RUT. The spxpm is a newer option.