:: Links

For detailed information on the S&P 100 Index.

For detailed information on the S&P 100 component stocks, including prices, charts and analysis.

OEX (and XEO) options are only traded on CBOE, the Chicago Board Options Exchange.

S&P 100

The S&P 100 Index, which is also produced by Standard & Poor's, is actually a subset of the larger S&P 500. It is made up of 100 major companies from a number of different industry groupings. Once again the index is capitalization weighted, in that the weighting given to any particular component of the index is determined by a combination of the market price of it shares multiplied by the number of outstanding shares. In this way, index is biased towards larger companies.

:: OEX Index Options

OEX Index options, which are traded exclusively on CBOE, are American style options in that they can exercised on any business day before they expire. They should be distinguished from XEO Index options which, while also based on the S&P 100, are European style - they can only be exercised on the last business day before expiration.

This distinction is important and should be clearly understood, as there are some advisors who trade OEX options and others who trade XEO options. With European style exercise, you have a margin of safety that you don't have with American style exercise.

:: Example

Suppose there is three weeks to go before expiry and you have written XEO calls. If the index moves above your strike price, thereby putting your options in-the-money, you can't be exercised. This gives you time to either allow the index to trade down (if your view of the market is bearish) or roll over your position (if your view is bullish). If you had written OEX options, you could be exercised as soon as the options went in-the-money.

:: Characteristics

As with LEAPS, the strike prices initially listed are in-the-money, out-of-the-money and at-the-money, with additional strikes being added at 5 point intervals as the market moves.
OEX options are cash settled, as opposed to equity options which are settled via the delivery of the underlying stock. This means that, if you are the writer of an OEX option and you are exercised, you will need to settle the amount owing in cash on the first business following the proper submission of the exercise notice.
The pricing of OEX options is similar to equity options because the same multiplier (100) is used. With equity options, this was done because the quoted option premium was for one option contract that represented 100 shares of the underlying. With OEX options, it is done because each point of the index is valued at $100.

As an example, with the index trading at 575.85, the 575 front-month options are quoted at $4.80. Therefore, to purchase one option contract would be $100 times the premium, which is $480. This option, in turn, represents $100 times its strike price, or $57,500. If you had written a 575 call contract and the Index settled at 585, your option would be 10 points in-the-money, requiring you to pay $1000 (10 points x $100) upon exercise.

:: ETFs

As with the other Indexes, the S&P 100 can also be traded through a third party, in this case iShares:

iShares	Symbol	Type
iShares S&P 100 Index Fund	OEF	ETF