Stock market index option


Stock market index option

Stock market index option is a derivative financial instrument.

The global market for exchange-traded stock market index options is notionally valued by the Bank for International Settlements at $368,900 million in 2005.A stock index option provides the right to trade a specific stock index at a specified price by a specified expiration date. A call option on a stock index gives you the right to buy the index, and a put option on a stock index gives you the right to sell the index. Options on stock indexes are similar to exchange-traded funds (ETF's), the difference being that ETF's values change throughout the day whereas the value on stock index options change at the end of each trading day.

See also

* Derivative (finance)


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