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index option

   Also found in: Wikipedia 0.01 sec.
Index Option
A call or put option on a financial index.

Notes:
Investors trading index options are essentially betting on the overall movement of the stock market as represented by a basket of stocks. Options on the S&P 500 are some of the most actively traded options in the world.


Index option

index option
A call option or put option with a specific index as the underlying asset. For example, a call option on the S&P 500 gives the option buyer the right to purchase the value of the index at a fixed price until a predetermined date. Index options provide a means to leverage a bet on the future direction of the market or of a particular industry segment without purchasing all the individual securities. Use of the option can entail considerable risk for an investor.

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Leeb edited Personal Finance for more than 13 years and, until recently wrote Leeb's Index Option Alert, which was published by Allie Ash's KCI Communications Inc.
Before moving back to Erie to join the family business, Jeremy worked in the Chicago area for several years with the Chicago Futures Group, Futrex Trading LLC and as an equity index option market maker on the Chicago Mercantile Exchange.
The OEX is the stock index option most actively traded among individual investors," says Stanley Marszalk, vice president of CMI Business Services Inc.
 
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