Contract Specifications | Trading
Example | Chart &
Quick Quote
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| Total Capitalization
of Assigned Shares Base Market Divisor |
Exercise (Strike) Price Intervals: The Exchange shall determine fixed-point intervals of exercise prices for index options. Generally, the exercise (strike) price intervals will be no less than $5. However, the Exchange may determine to list strike prices at no less than $2.50 intervals if the strike price is less than $200 for listed indexes, and in response to demonstrated customer interest or specialist request.
Premium Quotation: One point = $100. Thus a premium quote of 2 is $200. The minimum change in a premium under 3 is $5.00 and the minimum change in a premium of 3 or greater is $10.00.
Position Limits: 24,000
contracts on the same side of the market. Hedge exemptions are
available.
Margin: Uncovered writers must
deposit 100% of the option proceeds plus 20% of the aggregate contract value (current
index level multiplied by $100) minus the amount by which the option is out-of-the-money,
if any. Minimum margin is 100% of the option proceeds plus 10% of the aggregate
contract value. Long puts or calls must be paid for in full.
Trading Hours: 9:30 a.m.
to 4:00 p.m. EST/EDT (Philadelphia Time)
Issuer and Guarantor: The Options Clearing Corporation (OCC)
Trading
Example
An investor interested in capitalizing on an anticipated surge in gold stocks purchases 10 at-the-money XAU July 95 calls at 6 1/2 ( 10 x $6.50 x 100 = $6,500) in February. At July expiration, the XAU has risen to a value of 145, yielding the investor $43,500.
|
XAU value at expiration |
145 |
| Less
XAU call option strike | -95
|
|
________ | |
|
50 | |
| Intrinsic
value of option 50 pts. Multiply by # of contracts |
x10 |
|
________ | |
| Intrinsic
value of position ( measured in pts.) |
500 |
| Intrinsic
value of position 500 pts. Multiply by index multiplier ($100) |
x100 |
|
________ | |
| Proceeds |
$50,000 |
| Less
cost of XAU calls | -6,500
|
|
________ | |
| Net
Profit | $43,500 |
PHLX Gold/Silver Sector, XAUSM are service marks of the Philadelphia Stock Exchange, Inc.
*Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (“ODD”). Copies of the ODD are available from your broker, by calling 1-888-OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, IL 60606. The information on this Website is provided solely for general education and information purposes and therefore should not be considered complete, precise, or current. Many of the matters discussed are subject to detailed rules, regulations, and statutory provisions which should be referred to for additional detail and are subject to changes that may not be reflected in the Website information. The Philadelphia Stock Exchange assumes no responsibility for any errors or omissions in the Website. No statement within the Website should be construed as a recommendation to buy or sell a security or to provide investment advice.
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