CBOE S&P 500 Range Options (SRO) to Launch on August 28th

Do you believe that the S&P 500® (SPX) Index will be range-bound in the near future?

CBOE announced today that it will launch trading in a new type of S&P 500® Index options contract, known as CBOE S&P 500 Range Options (ticker: SRO), beginning on Tuesday, August 28. 

SRO options are designed to provide individual investors with a lower-risk, lower-cost way to trade S&P 500 Index options. 

SROs pay an exercise settlement amount if the settlement value of the underlying index at expiration selected by the investor falls within a specified “range length.” The range length for SROs will be set at 70 S&P 500 Index points.

SRO payouts work as follows: If the S&P 500 Index settlement value falls within the middle 50 points of the 70-point range, the payout for the option will be $1,000. If the S&P 500 Index settlement value falls within the 10 points on either side of the 50-point range, the payout amount will decrease linearly (e.g., positive payout will be between $999 to $1) to zero.

CBOE Chairman and CEO William J. Brodsky said that –

“Range options give investors with an outlook on S&P 500 Index prices a new way to gain exposure to the market — with less need for price precision. The new contract brings another dimension to our extensive S&P 500 Index option complex. Like SPX, SPX Weeklys and SPXpm, Range options provide a unique way for our customers to trade the S&P 500. Each of these products underscores CBOE’s commitment to develop new and innovative products that address the diverse needs of investors.”


For more information on CBOE S&P 500 Range options, see www.cboe.com/SRO.

To see if there were range-bound periods in the past, below is a 5-year chart on the SPX Index from https://www.cboe.com/indexcharts

Matt Moran