Cboe Begins Trading in S&P 500 Equal Weight Index Options

The move expands its suite of equity derivatives products aimed at both retail and institutional investors.

The new options, which began trading on 14 April, are said to be based on the S&P 500 Equal Weight Index, where each constituent is weighted equally at 0.2% following quarterly rebalancing. 

Cboe explained that, unlike the traditional capitalisation-weighted S&P 500 Index, the EWI offers different sector and factor exposures, potentially favouring smaller-cap stocks and reducing mega-cap concentration.

The firm adds that S&P 500 EWI options are cash-settled and feature European-style exercise. 

Each contract is based on 1/10th the value of the index, with a standard multiplier of $100—giving the options a notional value of around $63,200 as of 7 April.

“As investors turn to options at record levels to help manage U.S. equity market exposure and volatility, we are pleased to expand our S&P product suite with the launch of S&P Equal Weight Index options,” said Catherine Clay, Global Head of Derivatives at Cboe. 

“We expect these options to cater to both retail and institutional investors looking to diversify and implement a variety of trading strategies.”

Cboe plans to add PM-settled weekly options for SPEQX pending regulatory approval.