The Cboe Mini-SPX Index option contract, known by its symbol XSP, is designed to track the underlying S&P 500 Index.
At 1/10th the size of a standard SPX option contract, XSP provides greater flexibility for new index options traders or traders managing an individual portfolio.
Like SPX options contracts, XSP options offer the potential opportunity to manage large-cap U.S. equity exposure and execute risk management, hedging, and income generation strategies.
Disclosures:
*Under section 1256 of the Tax Code, profit and loss on transactions in certain exchange-traded options. including SPX Options, are entitled to be taxed at a rate equal to 60% long-term and 40% short-term capital gain or loss, provided that the investor involved and the strategy employed satisfy the criteria of the Tax Code. Investors should consult with their tax advisors to determine how the profit and loss on any particular option strategy will be taxed. Tax laws and regulations change from time to time and may be subject to varying interpretations. **Cboe Regulatory Circular RG15-183 notes that Cboe rules allow a short position in a cash-settled-index option established and carried in a margin account to receive covered margin treatment if the short option position is offset in the same account by an equivalent or greater position in an index-tracking ETF that is based on the same index that underlies the short option(s) and provided the investor's brokerage firm has such policies in place. ***In the case of a holiday on the settlement date, the settlement date is moved back one business day (eg. from Friday to Thursday), with the exception of Monday Weeklys, where the settlement date will move forward one business day (i.e. Monday to Tuesday). In addition, no SPX EOW, Monday Weeklys, +Tuesday Weeklys, +Wednesday Weeklys or +Thursday Weeklys+ will be listed that would have an expiration date that coincides with the expiration date of a traditional SPX option or SPX EOM option. ****Global Trading Hours (CTH) The trading hours for options on the SPX, SPXW (SPX Weeklys and SPX End-of-Month), and Mini-SPX (XSP) begin at 8:15 p.m. Eastern time and end at 9:15 a.m. Eastern time Please visit the Global Trading Hours page for more details.
XSP® vs SPY®
Index options and ETF options—especially those that track broad market indices like the S&P 500-are very similar.
With one trade, market participants can gain broad market exposure, hedge their portfolios, or execute a variety of trading strategies.
At 1/10th the size of SPX, XSP offers very similar notional size, weekly expirations, and PM-settlement to SPY, but with even more potential benefits.
Disclosures:
*Under section 1256 of the Tax Code, profit and loss on transactions in certain exchange-traded options, including SPX Options, are entitled to be taxed at a rate equal to 60% Long-term and 40% short-term capital gain or loss, provided that the investor involved and the strategy employed satisfy the criteria of the Tax Code. Investors should consult with their tax advisors to determine how the profit and loss on any particular option strategy will be taxed. Tax laws and regulations change from time to time and may be subject to varying interpretations.
XSP® vs SPY®
Index options and ETF options—especially those that track broad market indices like the S&P 500-are very similar.
With one trade, market participants can gain broad market exposure, hedge their portfolios, or execute a variety of trading strategies.
At 1/10th the size of SPX, XSP offers very similar notional size, weekly expirations, and PM-settlement to SPY, but with even more potential benefits.
Disclosures:
* Under section 1256 of the Tax Code profit and loss on transactions in certain exchange-traded options, including SPX Options, are entitled to be taxed at a rate equal to 60% long-term and 40% short-term capital gain or loss, provided that the investor involved and the strategy employed satisfy the criteria of the Tax Code. Investors should consult with their tax advisors to determine how the profit and loss on any particular option strategy will be taxed. Tax laws and regulations change from time to time and may be subject to varying interpretations.
** Global Trading Hours (GTH) The trading hours for options on the SPX, SPXW (SPX Weeklys and SPX End-of-Month), and XSP (Mini-SPX) begin at 8:15 p.m. Eastern time and end at 9:15 a.m. Eastern time. Curb session begins at 4:15 p.m. Eastern time and ends at 5:00 p.m. Eastern time. Please visit the Global Trading Hours page for more details.
Disclaimer:
Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Opening new options positions close to or on their expiration date comes with substantial risk of losses for reasons that include potential volatility of the underlying security and limited time to expiration. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request.
This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Tradient makes no representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose of the above content.