S&P 500 Stock Covered Call Indices Launched by S&P Dow Jones Indices
NEW YORK, June 12, 2013 /PRNewswire/ -- S&P Dow Jones Indices announced today the launch of the S&P 500® Stock Covered Call Index family – consisting of the S&P 500 Stock Covered Call Index, S&P 500 Financial Select Sector Stock Covered Call Index and S&P 500 Energy Select Sector Stock Covered Call Index. These indices seek to simulate a volatility driven covered call strategy based on the eligible individual constituents of the underlying indices.
"The launch of the S&P 500 Stock Covered Call Index family adds to the line-up of existing alternative income indices offered by S&P Dow Jones Indices," says Vinit Srivastava, Senior Director of Strategy Indices at S&P Dow Jones Indices. "What differentiates this index family from other covered call indices is that it writes a call option on each of the constituents which typically generates higher income than writing the call option on the entire basket of stocks. Such strategies have not been available within an index framework previously."
A covered call strategy is defined as an income generating strategy that is generally used in a neutral to slightly bullish market environment, where a slow and steady rise in market prices is anticipated. Each index is calculated on a hypothetical portfolio consisting of a long cash position in the respective underlying index and a basket of short out-of-the-money (OTM) calls on the eligible index constituents, which are rolled monthly on option expiration day.
For more detailed information on the S&P 500 Stock Covered Call Indices, including the methodology document, please visit: www.spdji.com
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S&P Dow Jones Indices LLC, a part of McGraw Hill Financial, is the world's largest, global resource for index-based concepts, data and research. Home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average™, S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of investors. More assets are invested in products based upon our indices than any other provider in the world. With over 830,000 indices covering a wide range of asset classes across the globe, S&P Dow Jones Indices LLC defines the way investors measure and trade the markets. To learn more about our company, please visit www.spdji.com.
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SOURCE S&P Dow Jones Indices