What is the difference between option on stock index and option on a stock index future? - index of tities.gif
I understand this option. But what is the difference between options on futures on stock indexes and options on stocks in the index?
Sunday, January 17, 2010
Index Of Tities.gif What Is The Difference Between Option On Stock Index And Option On A Stock Index Future?
2 comments:
The difference is that an option on a stock index of the effective index as the underlying. Thus, for the S & P 500 (SPX) options on the CBOE, the most important instrument is traded, the current S & P 500, which cites a lot of television and newspapers. These options are cash settled.
In addition, an option on a stock index future is the current futures contract, that the underlying indices. Thus, for options on the S & P 500 futures (eg E-mini, ticker-ES), which is on the CME, listed the basic tools are the E-mini futures contract. These options will be settled in cash (quarterly options) or lying futures contract next (standard) functions. For example, choices September September futures contracts expire underlying and settlement in cash and options to the relevant underlying futures contract. August-options have the same futures contract for September, when the underlying, but since the options expire on 1 August of last month, will be based in the futures contract in September.
This does not apply
The difference is, its underlying assets. The first value is the index of stock prices and the value of the second is based on futures based on stock indices.
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