Broader Exposure, Greater Flexibility
S&P 500 Equal Weight Index options provide exposure to all S&P 500 companies equally weighted at 0.2%. Based on 1/10th the value of the S&P 500 Equal Weight Index, these cash-settled, AM (SPEQX) and PM (SPEQW) settled, European-style options maintain the same trading mechanics and tax benefits as SPX options while offering unique trading opportunities and risk profiles.
Why Trade S&P 500 Equal Weight Index Options?
- Broad Exposure
- Access enhanced diversification and balanced exposure across all 500 constituents.
- Unique Performance Profile
- Benefit from historically different volatility and return patterns compared to cap-weighted SPX.
- Relative Value Trading
- Capitalize on relative value and dispersion-like trading opportunities between SPEQX/SPEQW and SPX.
- Tax Efficiency
- Enjoy potentially favorable tax treatment (60% long-term/40% short-term capital gains).*
- Institutional-Grade Structure
- Eliminate early assignment risk and physical delivery requirements through cash-settled, European-style exercise.
- Hedging Flexibility
- SPEQX and SPEQW options may be utilized to hedge the growing $70B+ equal-weight ETF market. ** **Source: S&P DJI
Overview of the S&P 500 Equal Weight Index
What’s the difference between S&P 500 Equal Weight Index Options and SPX?
Feature | SPEQX Options | SPX Options |
---|---|---|
Index Methodology | Equal-weighted (0.2% per constituent) | Market cap-weighted |
Sector Exposure | Balanced across sectors | Tech/Communications heavy |
Volatility Profile | Historically provides lower volatility | Higher volatility driven by large caps |
Contract Size | Smaller sized contract 1/10 value of S&P 500 Equal Weight Index | Full sized contract |
Client Use Case for S&P 500 Equal Weight Index Options
Asset Managers
Hedge Funds
ETF Issuers
RIAs and Wealth Managers
Trading Resources
Available Expirations and Trading Hours
AM-settled standard monthly SPEQX options expire on the third Friday of each month, with FLEX options also available for customized strike prices and expiration dates. PM-settled SPEQW options may include quarterly, end of month, weekly Friday and daily expirations.
SPEQX options trade during regular trading hours (RTH) from 9:30 a.m. ET to 4:15 p.m. ET on business days preceding the expiration date. SPEQW options trade during regular trading hours (RTH) from 9:30 a.m. ET to 4:15 p.m. ET on business days other than the expiration date. SPEQW option trade until 4:00 p.m. ET on the expiration date.
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Disclaimer * Under section 1256 of the Tax Code, profit and loss on transactions in certain exchange-traded options, including SPX Options, are entitled to be taxed at a rate equal to 60% long-term and 40% short-term capital gain or loss, provided that the investor involved and the strategy employed satisfy the criteria of the Tax Code. Investors should consult with their tax advisors to determine how the profit and loss on any particular option strategy will be taxed. Tax laws and regulations change from time to time and may be subject to varying interpretations.
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