The Chicago Board Options Exchange (CBOE) announced that effective today, FLexible EXchange (FLEX) options now can expire on any day of the month. This CBOE rule change, approved recently by the Securities and Exchange Commission (SEC), eliminates long-standing blackout dates for FLEX options on expiration Friday and the two business days both before and after.
By removing the blackout periods associated with key expiration periods, customers who trade over-the-counter equity and index contracts may now trade exchange-traded contracts with similar characteristics and no expiration restrictions.
By tailoring the terms of the contract to meet the changing needs of our customers, CBOE has retooled FLEX options to trade like over-the-counter products without sacrificing the benefits of exchange trading, such as transparency and guaranteed clearing, says William J. Brodsky, CBOE chairman and CEO. These benefits, combined with enhanced flexibility of the contract and the ease and anonymity of trading on the CFLEX system, make the new FLEX particularly useful in todays investment climate.
FLEX options are customized equity or index options contracts that provide investors with the ability to customize key contract terms including strike prices, exercise styles and expiration dates of up to ten years from the trade date, with the transparency, administrative ease and clearing guarantees of standard listed options. Currently, more than 2,300 equity options and 16 index options including the S&P 500 (SPX), Dow Jones Industrial Average (DJX), Russell 2000 (RUT), Nasdaq-100 (NDX) and S&P 100 (OEX) are available for FLEX trading at CBOE.
CBOE created the concept of FLEX index options in 1993 and FLEX equity options in 1996, and in 2007 launched the CFLEX trading system, the first Internet-based, fully automated, electronic FLEX options trading system in the U.S., to enhance the ability of institutional customers to trade on CBOE.
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