BEFRIEND THE TREND Short-term Options Trading Thread Message Board

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Strategies & Market Trends : BEFRIEND THE TREND Short-term Options Trading Thread

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Nov 6 4:00 PM EST

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To: bruceleroy1_- who wrote (3668)	6/20/2003 7:01:44 PM
From: Bridge Player	Read Replies (1) of 4058

I am not familiar with how the NDX expires. But the value of expiring options on SPX are computed based on the OPENING price of each of the underlying stocks on Friday morning. This can be some price that is never actually reached by the index itself that day. The "settlement price" is usually not posted until several hours after the opening. Not sure if NDX works the same way or not but the CBOE should have the rules posted somewhere. Edit: According to the Options Industry Council booklet, Exchange Listed Options, "NDX exercise-settlement value, NDS, is calculated based on a volume-weighted average of prices reported in the first five minutes of trading for each of the component securities on the last business day (usually a Friday) before the expiration date."

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