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SEC Approves CBOE to Trade SPXpm on C2 Electronic Platform

The new SPXpm is identical to CBOE's flagship SPX index options contract, except it has a "P.M." settlement.

CBOE Holdingsobtained approval from the Securities and Exchange Commission for its proposal to launch trading in SPXpm, its proposed new S&P 500 index option product.

SPXpm will be traded on the company’s all-electronic C2 Options exchange, whose platform is located in New Jersey.

C2’s SPXpm product will be a cash-settled index options based on the S&P 500 Index, the leading benchmark of the broader U.S. stock market.

SPXpm is almost identical in structure to the Chicago Board Options Exchange’s (CBOE) flagship S&P 500 SPX contract, the most-actively traded U.S. index option product, except, as the SPXpm name implies, it has a “p.m.” settlement.

“We are pleased to provide investors with a new, efficient way to trade options on the S&P 500,” commented William J. Brodsky, CBOE Holdings Chairman and CEO, in Friday’s 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.”

Brodsky continued, “The launch of SPXpm will enable us to broaden our 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 SPX AM with the ability to negotiate large, complex orders afforded by floor trading at CBOE.”

According to CBOE’s August volume report, C2 posted its most active month ever in August 2011, surpassing July 2011 volume records. August ADV was 310,800 contracts, up 41 percent from July 2011 ADV of 220,100 contracts.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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