Spx options trading times

AM Settlement AM Exercise Settlement is established by calculating the opening prices of the individual component stocks of an index and thus the index option is exercised or sold based on that value.

AM Settlement Delayed AM settlements are susceptible to certain glitches in the system of reporting, as the opening value of the index is the respective opening values of all of the stocks of the index. But sometimes a stock may not actually trade for several hours or may not trade at all on a given day, delaying the calculation of the final settlement value. Most often the investor can sleep soundly as large moves in the index seldom occur between Thursday afternoon and Friday morning.

Unfortunately, should an adverse change in the value of an index with AM settlement occur between Thursday's close and Friday's open, an investor could experience a very disappointing loss after a gain appeared certain on Thursday afternoon. Additionally, since index options stop trading for AM settled indexes at Thursday's market close, an index option investor basically becomes a captive to the index option with AM settlement after the market closes on Thursday.

There's no way for an investor to exit an index option with AM settlement after Thursday's market close, yet the underlying index is subject to change. A market-moving event occurring after Thursday's market close can significantly move an index on Friday causing potential heartburn for index option investors.

AM Settlement Risks with Index Options Investors trading index option credit spreads should be very careful in trading index options with AM settlement as sudden moves between Thursday's close and Friday's open can turn a sure gain on Thursday into a very big loss on Friday. Since the RUT is AM settled, it would appear that any bear-call credit spreads position with a short call option strike price greater than However, the final settlement value for RUT was determined to be With the What to Do About AM Settlement and Index Credit Spreads The best answer as to what to do about AM settlement and index credit spreads is to either avoid index options with AM settlement or to simply exit the position on Thursday if the short option strike price is "close" to the value of the index.

An investor deciding to exit a "close" position early, must decide on a value for when the index is "close" to the strike of the short index option. The amount you will receive from the SPX option sale will still be equal to it's intrinsic value. Now, in this scenario, it would not make any sense at all to exercise the call option as it will result in additional loss. Fortunately, you are holding an option contract, and not a futures contract, and so you are not obliged to anyway.

Buying straddles is a great way to play earnings.

Difference 2: Settlement Method

Many a times, stock price gap up or down following the quarterly earnings report but often, the direction of the movement can be unpredictable. For instance, a sell off can occur even though the earnings report is good if investors had expected great results If you are very bullish on a particular stock for the long term and is looking to purchase the stock but feels that it is slightly overvalued at the moment, then you may want to consider writing put options on the stock as a means to acquire it at a discount Also known as digital options, binary options belong to a special class of exotic options in which the option trader speculate purely on the direction of the underlying within a relatively short period of time Cash dividends issued by stocks have big impact on their option prices.

This is because the underlying stock price is expected to drop by the dividend amount on the ex-dividend date As an alternative to writing covered calls, one can enter a bull call spread for a similar profit potential but with significantly less capital requirement. In place of holding the underlying stock in the covered call strategy, the alternative Some stocks pay generous dividends every quarter.

Airline Index. Computer Technology Index. Major Market Index.

Natural Gas Index The. Oil Index. Interest Rate Options. Dow Jones Industrial Average. Dow Jones Transportation Average.

Dow Jones Utility Average. Jumbo DJX Index.

• Know the key differences before trading these index options!
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Dow Jones Internet Commerce Index. Mexico Index. Morgan Stanley Oil Services.

Dow 10 Index. Morgan Stanley Biotech. Morgan Stanley Retail. Russell Growth Index.

Russell Value Index. Russell MidCap Growth Index. Russell MidCap Index. Mini-Russell Index Options. Russell MidCap Value Index.

Can You Trade On The Weekends?

Russell Index. ISE Semiconductors. Mini FTSE ISE Gold Index. ISE Morgan Stanley Technology Index. Mini-Russell Index. ISE Pharmaceuticals.