SPX Index Option Expiration and Settlement

Options Trading Topic: Option Expiration

Dear Options Trading FAQ:

I just went through my first SPX option expiration and am utterly confused. How did it settle? The figures don't match my opening print of the SPX on expiration friday. Did the batteries on my calculator run out?

Bewildered Options Trader

Dear Expired Option Trader:

Your calculator is just fine, but the user needs adjustment. What you want to look at is the SET or settlement price that comes out around noon time on expiration day. It represents the theoretical opening of the S&P 500 index. It will differ from the SPX opening print because that figure does not wait for all 500 components to open. Again, I refer you to the CBOE website which I mentioned in the previous letter.

Good luck and trade well! Remember, an educated options trader is the best options trader. Browse these books books on trading options.

Tags: Options Trading, Index Options, SPX Options, Options Settlement

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