Seduced by Index Options A Chance for Stock Trading Pros to Bail Out the Exchanges?
Traders Magazine, March 2005
The world of index options trading may never be the same. The ability to trade index options is becoming much easier at a time when options exchanges are facing unprecedented change. This has led to a huge reduction in equity options margins following earlier margin compression as a result of decimal pricing. But index options' margins stayed stable largely because there was no competition. It was that simple. For example, today if you want to trade options on the popular S&P 500 (SPX) and S&P 100 (OEX) indexes, you have to go to the Chicago Board Options Exchange. Indeed, the exclusive nature of SPX and OEX options has been a lifesaver for the CBOE. In some cases, exclusive license agreements have made them the property of one exchange.
All TradersMagazine.com articles are archived after 7 days. REGISTER NOW for unlimited access to all recently archived articles, as well as thousands of searchable stories. Registered Members also gain access to exclusive industry white paper downloads, web seminars, online technology directory, the iPad App, and conference discounts. Qualified members may also choose to receive our free monthly magazine and any of our e-newsletters covering the latest breaking news, opinions from industry leaders, developing trends and trading strategies.