CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that it will launch SPXpm long-term index option series -- "Super LEAPS" options -- on its C2 Options Exchange (C2) on Thursday, March 1.
CBOE Holdings' Super LEAPS, which initially will be available for SPXpm options, feature longer-dated expirations than standard LEAPS® options (Long-term Equity AnticiPation Securities(SM)). LEAPS options contracts, developed and introduced by the Chicago Board Options Exchange(CBOE) in 1990, currently limit expirations to up to three years. The Super LEAPS modification will extend SPXpm expirations to as long as five years. SPXpm is C2's all-electronic, p.m.-settled version of CBOE's S&P 500 Index options contract (SPX).
SPXpm Super LEAPS were created for insurance companies, pension funds and other institutions that currently hedge their longer-dated equity index exposures in the over-the-counter (OTC) market, but also want the pricing transparency afforded by exchange-traded index options. The added transparency allows customers to see and access publicly-available bids, offers and the latest market prices — a benefit unavailable in the OTC market.
"CBOE's S&P 500 options complex, which includes our flagship SPX contract, SPX Weeklys and SPXpm, allows customers to choose the method of trading the S&P 500 that best meets their investment needs. The ability to trade longer-dated options with increased pricing transparency is of particular appeal to OTC users, and we are pleased to accommodate these customers by adding this very practical dimension to our S&P 500 product line," CBOE Holdings President and COO Ed Tilly said.
SPXpm Super LEAPS options contracts will feature December expirations. Initially, C2 will list expirations for December 2012, 2013, 2014, 2015 and 2016.
C2's SPXpm product is a cash-settled index option based on the S&P 500 Index, the premier benchmark of the broader U.S. market. SPXpm is similar in structure to CBOE's flagship S&P 500 SPX contract, the most actively-traded U.S. index options product, except it has a "p.m." settlement — the settlement convention found in the OTC market. SPXpm also features European exercise, which eliminates the risk of early assignment.
For more information about SPXpm options on C2 Options Exchange, please visit www.cboe.com/SPXpm.
