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Not quite correct. There are options traded on CBOE with the cash SPX as
underlying. There are also options traded on CME with the S&P futures as
the underlying.
Benoit Cabanne wrote:
> Yes I think the other big difference is that the OEX options are cash
> index options, meaning that the underlying is the cash index, whereas
> the SPX options are related to a futures contract as an underlying.
> This makes quite a big difference.
>
> KIMBOLEGSA@xxxxxxx wrote:
>
> > Could someone please help me with the following:
> >
> > The only differences between the OEX and the SPX of which I am aware
> > are:
> >
> > a). The OEX is based on the S&P 100 and that the SPX is based on the
> > S&P 500.
> > b). The OEX is an American style option and the SPX is European in
> > style.
> >
> > It this second difference that puzzles me. I thought the only
> > difference
> > between the two is that American style options can be exercised before
> > their
> > expiration date, whereas European style options can't.
> >
> > Is there some other important difference of which I am unaware?
> >
> > If not, then I am further puzzled.
> >
> > Most options are never exercised but are repeatedly bought and sold
> > during
> > their life span. Therefore, I thought that the ability to exercise an
> > option
> > is only of any use to the 'Commercials' who would eventually want to
> > take
> > delivery of the underlying.
> >
> > If the underlying is a tangible asset such as a Stock or Commodity,
> > then this
> > is an important distinction.
> > But as Index options are intangibles and there isn't anything
> > underlying of
> > which to take delivery, of what use is the ability to exercise before
> > expiration?
> >
> > ……..And another question: I have been monitoring the Put/Call ratios
> > between
> > the two. Would there be any validity in an observation that the
> > 'strong hands'
> > use the SPX instead of the OEX to hedge against their S&P 500 Futures
> > positions or is this just wishful thinking on my part?
> >
> > Has anyone who also looks at the relationship between these two
> > indices
> > extracted any useful conclusions that they would be willing to share?
> >
> > Many thanks in advance.
> >
> > Rgds,
> >
> > Kim.
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