Actually, mini-SPX options will be the same to SPX options, as MNX options are to NDX options. But you're right, mini-SPX wil be to SPY, like DJX are to DIA, or is it the other way around.... Is that confusing or what!?
Well that's what's worrying me.. In case of the monthly expiration,there were buyers and sellers for almost all types of options (ATM and OTM) I'm afraid that one will hardly find buyers for OTM options in case of such rapid time decay. Does anyone have an idea of the time intervalls the XSP options will be available for? (only for the next week,month,2 months) Thx
Are you asking about mini-SPX (XSP) or weeklys? You post seem to be mixing the two together. If you're asking about weeklys then the answer is quite obvious - options will be only for the next week, otherwise it defies the purpose of the weeklys.
Sorry MTE I just read the entire article.. The weeklys are going to be listed on a Friday and expiring the following Friday. I was thinking that they will be listed a bit earlier (let's say) 2-3 Weeks before expiration,just to use the greater time value..
I'm looking forward to these. As a dedicated seller of theta I hate expiration week because the gamma gets to be too much for my risk adverse nature to stomach and I wind up rolling out before I can harvest the richest theta. Weeklys should allow me to fine tune the blend (i.e., with monthlys) and keep the theta more or less constant week in and week out. Thank you CBOE.
CBOE TO LAUNCH MINI-SPX INDEX OPTIONS ON TUESDAY, OCTOBER 25, 2005 CHICAGO - October 20, 2005 -- The Chicago Board Options Exchange (CBOE) will launch Mini-SPX options, based on the Standard & Poor's 500 Stock Index, on Tuesday, October 25, 2005, as previously announced. Mini-SPX options (ticker symbol XSP) will be 1/10th the value of the S&P 500 Index, and will trade on CBOE's Hybrid 2.0 Trading System, which includes Remote Market Makers. Trading XSP options on CBOE's Hybrid Trading System will offer investors a smaller-sized S&P 500 contract with the combined advantages of electronic trading and the open-outcry market on a single platform. "CBOE's Index options have been the fastest growing segment of our business due to the increased interest in option products that provide the benefit of trading the broad market. The unparalleled liquidity found in CBOE's Index complex and the ease of access through the Hybrid Trading System is a powerful combination that delivers real value to our customers," said CBOE Chairman and CEO William J. Brodsky. "CBOE now offers a full suite of S&P Index products, each with unique characteristics that appeal to different customers' needs, and combined, will create new trading opportunities. Our new Mini-SPX options provide all the advantages of trading the broad-market S&P 500, yet come in a manageably sized contract, with the certainty of European-style exercise, efficiency of cash-settlement and the benefits of our Hybrid Trading System, all of which will appeal to a wide range of customers," said CBOE Vice Chairman Edward T. Tilly. "Through innovation by our members and new product development team, CBOE is again adding real value, and real options, for investors." "Historically, options have been a great way to trade the overall direction of the market - as defined by the S&P 500," says Robert Shakotko, Managing Director of Index Services at Standard & Poor's. "With over $3.5 trillion benchmarked to the S&P 500, the new Mini-SPX options will provide investors with access to the world's most followed index in a liquid and affordably-sized contract."
I fail to see how these products are going to be effective. Very few traders I know can trade short duration gamma at all effectively where they are long or short it. It's the worst of both worlds. I'm sure there will be plenty of arb opportunities for the Citadel's of the world. Just don't see the avg ET guy doing anything with these.