CHICAGO, Aug. 21, 2012 /PRNewswire/ -- Chicago Board Options Exchange, Incorporated (CBOE) announced today that it will launch trading in a new type of S&P 500® Index options contract, known as CBOE S&P 500 Range options (ticker: SRO), beginning on Tuesday, August 28.
CBOE Range options were designed to provide individual investors with a lower-risk, lower-cost way to trade S&P 500 Index options.
SROs pay an exercise settlement amount if the settlement value of the underlying index at expiration selected by the investor falls within a specified "range length." The range length for SROs will be set at 70 S&P 500 Index points.
SRO payouts work as follows: If the S&P 500 Index settlement value falls within the middle 50 points of the 70-point range, the payout for the option will be $1,000. If the S&P 500 Index settlement value falls within the 10 points on either side of the 50-point range, the payout amount will decrease linearly (e.g., positive payout will be between $999 to $1) to zero.
"Range options give investors with an outlook on S&P 500 Index prices a new way to gain exposure to the market -- with less need for price precision," CBOE Chairman and CEO William J. Brodsky said. "The new contract brings another dimension to our extensive S&P 500 Index option complex. Like SPX, SPX Weeklys and SPXpm, Range options provide a unique way for our customers to trade the S&P 500. Each of these products underscores CBOE's commitment to develop new and innovative products that address the diverse needs of investors."
CBOE, the largest U.S. options exchange and creator of listed options, continues to set the bar for options trading through product innovation, trading technology and investor education. CBOE offers equity, index and ETF options, including proprietary products, such as S&P 500 options (SPX), the most active U.S. index option, and options on the CBOE Volatility Index (the VIX Index). Other products engineered by CBOE include equity options, security index options, LEAPS options, FLEX options, and benchmark products such as the CBOE S&P 500 BuyWrite Index (BXM). CBOE is home to the world-renowned Options Institute and www.cboe.com named "Best of the Web" for options information and education. CBOE is regulated by the Securities and Exchange Commission (SEC), with all trades cleared by the OCC.
CBOE®, Chicago Board Options Exchange®, FLEX®, LEAPS®, CBOE Volatility Index® and VIX® are registered trademarks, and BuyWrite(SM), BXM(SM), SRO(SM), SPX(SM), Weeklys(SM) and The Options Institute(SM) are service marks of Chicago Board Options Exchange, Incorporated (CBOE). SPXpm(SM) is a service mark of C2 Options Exchange, Incorporated (C2). Standard & Poor's®, S&P® and S&P 500® are registered trademarks of Standard & Poor's Financial Services, LLC and have been licensed for use by CBOE.