CBOE Announces Increased Call Strike Flexibility In Equity FLEX® Options

The Chicago Board Options Exchange (CBOE) today announced that Equity FLEX® call strikes will no longer be constrained to standard strikes. Effective immediately Equity FLEX ® call strike prices, as well as put strike prices are available in 1/8th-point increments. According to a recent IRS ruling, the existence of flexible call strikes will have no effect on the determination of "qualified covered call" status, an exemption from the US tax code's straddle rules for exchange-traded options. FLEX (FLexible Exchange®) Options are customized options products traded at the CBOE. FLEX® Options offer the ability to customize key contract terms such as strike prices, exercise dates, contract size and exercise style (e.g., American or European). These options provide many of the benefits of standardized listed options such as administrative ease and the virtual elimination of counter-party risk. FLEX® Options, backed by the Options Clearing Corporation, are an exchange-traded alternative to the over-the-counter (OTC) market. Due to this development, institutions and high net-worth individual investors will now have greater flexibility to tailor their call and put options to their specific needs. The move should increase the use of many strategies. For example, the zero-premium collar, a strategy involving the purchase of puts and the sale of calls against stock positions. For more information about CBOE Equity and Index FLEX® Options, visit the CBOE web site at http://www.cboe.com/institutional/flex.htm or call 1-800-OPTIONS (1-800-678-4667). Please see http://www.cboe.com/resources/tax.htm for more information about tax consequences of exchange-traded options. CBOE, the world's largest options marketplace and creator of listed options, is regulated by the Securities and Exchange Commission (SEC).