The Chicago Board Options Exchange announced last Friday that the Securities and Exchange Commission has approved its rule filing to launch, on a pilot basis, SPXpm, its proposed new S&P 500 Index option product.
SPXpm will be traded on the C2 Options Exchange, the CBOE’s all-electronic exchange.
C2’s SPXpm product will be a cash-settled index option based on the S&P 500 Index. SPXpm is almost identical in structure to the CBOE’s flagship S&P 500 SPX contract, except that as the SPXpm name implies, it has a "p.m." or afternoon settlement.
"We are pleased to provide investors with a new, efficient way to trade options on the S&P 500," said William J. Brodsky, CBOE Holdings chairman and chief executive, in a release. "SPXpm will offer users ‘point-and-click’ convenience, and the large contract size — with one SPXpm contract being ten times larger than one SPY option contract — will make SPXpm extremely cost-effective to trade."
According to the release, the launch of SPXpm will enable CBOE to broaden its customer reach by providing two very deep pools of liquidity to trade the S&P 500 Index — one trading SPXpm electronically on C2, and the other trading the traditional SPX product with the ability to negotiate large, complex orders afforded by floor trading at CBOE.
Details regarding a launch date will be announced in the near future.
