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1983 to 2003, Twenty Years of OEX
Ten years after creating the listed options market in 1973, CBOE revolutionized the derivatives industry again by introducing options on broad-based stock indexes. The first such index, the CBOE 100 Index, and known today as the S&P 100 Index (OEX), was launched on March 11, 1983.
On its first day of trading, volume in OEX options was 4,827 contracts. By the end of its first year, OEX average daily volume had soared to more than 100,000 contracts, quickly establishing OEX as one of the most actively traded products in the world.
In July 1983, CBOE reached an agreement with Standard and Poor's whereby the CBOE 100 Index was renamed the S&P 100 Index (OEX). As part of that same agreement, CBOE began listing options on the S&P 500 Index (SPX).
Two decades and millions of trades later, OEX stands as one of the Exchange's premier indexes. Volume in 2002 totaled 13,530,159 contracts and, through the first two months of 2003, volume has surpassed the previous year-to-date total by 41%. Volume in SPX index options totaled 29,939,598 contracts in 2002, making it the most-actively traded index options at CBOE. Year-to-date SPX volume in 2003 is ahead of last year's pace by 39%.
Why Index Options?
Index options provide broad market exposure by allowing investors to own options on the market as a whole, or in a specific market industry, through a single transaction. Index options can be one of the most efficient ways for investors to adjust their equity exposure and diversify holdings in their portfolios.
"During uncertain market conditions, options in general, and index options in particular, can provide investors an opportunity to maintain market exposure while limiting the risk and volatility associated with individual stocks in the equity market," said William J. Brodsky, Chairman and CEO, Chicago Board Options Exchange. "Over the past two decades, index options have played an integral role in the evolution of the options industry and today, are widely regarded as one of the most effective instruments for managing an investment portfolio."
CBOE & Index Options Today
Presently, CBOE lists options on a total of 30 indexes, including broad-based, benchmark indexes, such as: the S&P 100 (OEX), S&P 500 (SPX), Dow Jones Industrial Average (DJX), Russell 2000 Index (RUT) and Nasdaq-100 Index (NDX and MNX). In addition, CBOE offers a wide range of options on industry-specific, sector indexes, including: Dow Jones Transportation Average (DTX), Dow Jones Utility Average (DUX), Morgan Stanley Biotech Index (MVB), Morgan Stanley Retail Index (MVR), Goldman Sachs Technology Index Internet Index (GIN), Goldman Sachs Technology Index Software Index (GSO), CBOE Oil Index (OIX) and CBOE Mexico Index (MEX).
Trading hours for index options at CBOE are 8:30 a.m. to 3:15 p.m. (Chicago time). For more information on index options and a complete listing of index options available at CBOE, visit the Products section of the CBOE website at www.cboe.com/Products/IndexOptions.
Growth In CBOE Index Volume
Over the past two decades, volume has grown tremendously in CBOE's index options products, from a total of 10,662,498 contracts traded in 1983 to a total of 94,365,744 contracts traded in 2002.
In the wake of the unsettled stock market during the last year, investors have been using index options as portfolio protection from volatile market conditions. Exchange-wide index volume at CBOE has increased for the past ten consecutive months when compared to year-ago levels. And, CBOE year-to-date total index volume for the first two months of 2003 is up 37% over the year-ago level, while open interest stands 57% above 2002.
New Listings
Demonstrating an ongoing commitment to provide innovative and diverse index options products for its customers, on Friday, March 14th, CBOE will begin listing two additional indexes - options based on the CBOE Asia 25 Index (EYR) and options based on the CBOE Euro 25 Index (EOR).
CBOE, the world's largest options marketplace 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 web site at www.cboe.com.
