How does exercise work regarding OEX options?
Although the value of your OEX options is based on the value of the S&P 100 Index, you will not receive, or have to deliver, stocks if you exercise the options. You will receive cash if the option has value at expiration. This is known as cash-settlement. This is a key difference between index options and equity options. Equity options can be exercised as a means to buy or sell the underlying stock. The process is different with index options because they are cash-settled. When an OEX option is exercised, the holder receives the in-the-money amount in cash. Resources for OEX Index Investors To learn more about index options, review the S&P 100 product specifications and the index strategy pages below. Also, The Options Toolbox offers great features both for novice and experienced options investors and is available for FREE download from this website.
Although the value of your OEX options is based on the value of the S&P 100 Index, you will not receive, or have to deliver, stocks if you exercise the options. You will receive cash if the option has value at expiration. This is known as cash-settlement. This is a key difference between index options and equity options. Equity options can be exercised as a means to buy or sell the underlying stock. The process is different with index options because they are cash-settled. When an OEX option is exercised, the holder receives the in-the-money amount in cash.
