The amount you will receive from the SPX option sale will still be equal to it's intrinsic value. Now, in this scenario, it would not make any sense at all to exercise the call option as it will result in additional loss. Fortunately, you are holding an option contract, and not a futures contract, and so you are not obliged to anyway. Buying straddles is a great way to play earnings. Many a times, stock price gap up or down following the quarterly earnings report but often, the direction of the movement can be unpredictable.

For instance, a sell off can occur even though the earnings report is good if investors had expected great results If you are very bullish on a particular stock for the long term and is looking to purchase the stock but feels that it is slightly overvalued at the moment, then you may want to consider writing put options on the stock as a means to acquire it at a discount Also known as digital options, binary options belong to a special class of exotic options in which the option trader speculate purely on the direction of the underlying within a relatively short period of time If you are investing the Peter Lynch style, trying to predict the next multi-bagger, then you would want to find out more about LEAPS® and why I consider them to be a great option for investing in the next Microsoft® Cash dividends issued by stocks have big impact on their option prices.

This is because the underlying stock price is expected to drop by the dividend amount on the ex-dividend date As an alternative to writing covered calls, one can enter a bull call spread for a similar profit potential but with significantly less capital requirement. In place of holding the underlying stock in the covered call strategy, the alternative Some stocks pay generous dividends every quarter.

You qualify for the dividend if you are holding on the shares before the ex-dividend date To achieve higher returns in the stock market, besides doing more homework on the companies you wish to buy, it is often necessary to take on higher risk. A most common way to do that is to buy stocks on margin Day trading options can be a successful, profitable strategy but there are a couple of things you need to know before you use start using options for day trading Learn about the put call ratio, the way it is derived and how it can be used as a contrarian indicator Put-call parity is an important principle in options pricing first identified by Hans Stoll in his paper, The Relation Between Put and Call Prices, in It states that the premium of a call option implies a certain fair price for the corresponding put option having the same strike price and expiration date, and vice versa In options trading, you may notice the use of certain greek alphabets like delta or gamma when describing risks associated with various positions.

These options can be traded in a regular securities brokerage account that is approved for options. CBOE's binary options have experienced impressive volume early on, reaching as much as 10, to 12, contracts on some days and averaging 2, contracts daily during September. CBOE has seen strong institutional use of these contracts. Based on customer feedback, we fully expect the addition of puts to spur more brokers-dealers to come on-line to handle binaries, thus enabling more individual investors to access these products.

Contract Specifications Identical for both contracts:.

The U. Securities and Exchange Commission approved CBOE's rule filing to list binary options on broad-based indexes on May 22, , and trading is scheduled to start on July 1. Binary options have just two possible outcomes - a payoff of a set amount or nothing at all.

In addition, because they are exchange-traded, CBOE binary options have clearing guarantees unavailable in the over-the-counter market. CBOE binary options offer a number of strategies for users. For example, a hedger typically using a covered write might use a binary option to avoid giving up too much upside. Buyers of binary options might take a position that the underlying broad-based index will settle above a particular level at expiration, while sellers could take a position that the underlying broad-based index will settle below a threshold.

Both buyers and sellers of binary options will know exactly how much can be made or lost if the positions are held to expiration. In addition, binary option spreads may be traded as a way to take a position that the underlying broad-based index will settle inside or outside a range of index levels. CBOE's wholly owned subsidiary, CBOE Futures Exchange CFE , also lists futures on the VIX, its flagship product, which in May traded almost , contracts.

to p. Chicago time -Position Limits:1,, contracts on the same side of the market Contracts vary: -Last Trading Day and Expiration Dates: -The last trading day for SPX binary options BSZ will be the Thursday before the third Friday of the expiration month, and the options will expire on the Saturday following the third Friday of the expiration month.

The options will expire on the Wednesday that is 30 days prior to the third Friday of the calendar month immediately following the expiration month e. CBOE, the largest options marketplace in the U. and the creator of listed options, is regulated by the Securities and Exchange Commission SEC.

For additional information about the CBOE and its products, access the CBOE website at: www. Press Contacts : Gail Osten osten cboe. com Gary Compton comptong cboe. com CBOE®, Chicago Board Options Exchange®, CBOEdirect®, CBOE Volatility Index®, VIX®, XEO® and OEX® are registered trademarks of Chicago Board Options Exchange, Incorporated. SPXSM, XSPSM MNXSM, CBSXSM and CBOE Stock ExchangeSM are service marks of Chicago Board Options Exchange, Incorporated.

CFESM and CBOE Futures Exchange are service marks of CBOE Futures Exchange, LLC. CBOE's Options on the Dow based on the Dow Jones Industrial Average and financial products based on the CBOE DJIA Volatility Index are not sponsored, endorsed, marketed or promoted by Dow Jones. and are licensed for use by the Chicago Board Options Exchange, Incorporated pursuant to a License Agreement.

The Russell ® Index is a registered trademark of The Frank Russell Company used under license. Nasdaq®, Nasdaq®, Nasdaq Index®, and Nasdaq Index Tracking StockSM are trademarks of The Nasdaq Stock Market, Inc. iShares is a service mark of Barclays Global Investors, N. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of , as amended. In connection with the proposed restructuring transaction, CBOE Holdings, Inc. CBOE Holdings, the CBOE and their respective directors, executive officers and other employees may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction.

Back To Press Releases.

Some stocks pay generous dividends every quarter. CBOE, the largest options marketplace in the U. Press Contacts : Gail Osten osten cboe. In practice, it is usually not necessary to exercise the index call option to take profit. CBOE's wholly owned subsidiary, CBOE Futures Exchange CFE , also lists futures on the VIX, its flagship product, which in May traded almost , contracts.

Categories:

• Binary Options
• Forex Brokers
• Forex Bitcoin
• Binary Options online
• Forex