Guys, A question was put to me by a fellow trader about SPX cash indices option listings. Why when you look at the SPX you see two puts contracts listed for a single strike. Different expirations with quarterly listings, premiums (huge discrepencies)for them as well. 1,225.00 SPX111217P01225000 10.00 0.00 1,225.00 SPXQ111230P01225000 25.50 1.10 1,230.00 SPX111217P01230000 14.00 0.00 1,230.00 SPXQ111230P01230000 21.30 5.70 What's the story/purpose of this? Thanks, J-Law
1,225.00 SPX111217 P01225000 10.00 0.00 expires 12/17 1,225.00 SPXQ111230 P01225000 25.50 1.10 expires 12/30
sorry, I misread your question. It won't let me edit my answer since I'm new. So I guess I'm stuck with a stupid first post. I guess I should have just stayed a lurker.
SPX offers weekly, regular and quarterly expirations. Most of us are traders and don't care about the dates they expire. Funds like the quarterly options that offer protection or speculation until the end of the quarter, then expire and are then off their reported portfolios.
Thanks guys. What still escapes me is that they both have about the same time to expiration. Yet, the premiums are not equal. Even just going by BSM rule of thumb, all things being equal plus 2weeks, they should be priced about the same. Additional 2 weeks I don't think would make a big difference as theta at this point is rippin' away regardless. Once again, thanks gentlemen.
one is 1 week, one is 3 weeks. 2 weeks doesn't matter if it's a difference between a 6 month and 6.5 month option, but when it's equal to three times the time to maturity it does.