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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: OX who wrote (29671)	10/14/1999 5:48:00 PM
From: JDinBaltimore	Read Replies (1) \| Respond to of 99985

OX, CBOE Info Attached It's confusing as hell, I tried to have a broker explain once, and we both ended up confused! The best thing is the little calendars the brokers give out. The one I have here shows SPX 500 OEX 100 last day to trade Thursday defore 3rd Friday of each Month except for European and LEAPS which Have Green Diamonds <g> they can trade on Friday if I'm reading correct. They all settle Saturday. I check CBOE site to see if I can find the actual 30 page rules.<G> JD What is a European-style and American-style option? American-style is an option contract that can be exercised at any time between the date of purchase and the expiration date. Most exchange-traded options are American-style. All stock options are American-style. European-style is an option contract that can only be exercised on the expiration date. What is the expiration date? The last day (in the case of American-style) or the only day (in the case of European-style) on which an option may be exercised. For stock options, this date is the Saturday immediately following the third Friday of the expiration month; however, brokerage firms may set an earlier deadline for notification of an option buyer's intention to exercise. If Friday is a holiday, the last trading day will be the preceding Thursday. What is the last full day of trading in the Equities, OEX and SPX? How do they settle? The last full day of trading for Equities and OEX is the 3rd Friday of the month. They settle on the close. The last full day of trading for SPX is the Thursday before the 3rd Friday of the month. SPX settles on the opening of the 500 stocks that make up the index on Friday morning. Friday holidays push all of these dates ahead one day. What is a strike price and how are they determined? A strike price is the actual numeric value of the option. For example, a May option may have strike prices of 45, 50 and 55. Strike prices are determined when the underlying reaches a certain numeric value and trades consistently at or above that value. If, for example, XYZ stock was trading at 49, hit a price of 50 and traded consistently at this level, the next highest strike may be added.