OEX Options (S&P 100
OEX is the ticker symbol for the S&P 100 Index
(“Standard and Poors S&P 100 Stock Index”). OEX options allow traders
to speculate on the movement of the OEX. The OEX consists of 100 blue-chip
stocks from diverse industry groups - they provide a good measure of the
market's overall performance. The OEX is a subset of the
S&P 500 index;
the OEX is based on 100 of the 500 stocks of the S&P 500. OEX issues are not
equally weighted - the larger a stock, the greater its influence on the
Investors have been using OEX options (with American-style
exercise) since 1983. More than one billion OEX options have been traded
since then, making the OEX one of the most popular equity portfolio
management tools in history.
In February 2001, options on iShares(SM) S&P 100 (ticker
symbol OEF), with American-style exercise, were introduced.
In July 2001, the CBOE introduced S&P 100 options with
European-style exercise (ticker symbol XEO)
OEX options are popular for several reasons:
- Investors can trade OEX options rather than analyzing
and investing in the numerous individual stocks of the S&P 100 index.
This reduces the number of trading decisions greatly;
- Purchasing S&P 100 options is less risky than buying and
selling numerous individual stocks;
- Trading OEX options requires less capital than trading
the options of individual stocks.
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