FLEX Options
FLexible EXchange (FLEX) options combine the benefits of customization with the advantages of listing and are available on all option products listed NYSE Amex Options. Both Equity FLEX and Index FLEX options allow investors to customize key contract terms, including expiration date, exercise style, and exercise price, and to take advantage of expanded position limits.
Equity FLEX
Equity FLEX options are designed to extend investor access to customized derivative products. With Equity FLEX options, investors are able to set key contract terms like exercise prices, exercise styles, and expiration dates, and to trade in size, with no position or exercise limits.
At the American Stock Exchange, Equity FLEX options are traded on certain common stocks, American Depositary Receipts, exchange traded funds and HOLDRS.
A minimum of 150 contracts or $1 million notional value (i.e., strike price=$100 then notional value=$10,000/contract which would require a minimum of 100 contracts) is required to open a new Equity Flex Option Series.
A minimum of 100 contracts is required to establish additional opening positions in an existing Equity Flex Series. For closing transactions the minimum is 25 contracts or the remaining opening interest.
Index FLEX
Index FLEX options are designed to extend investor access to customized derivative products. With Index FLEX options, investors have the ability to set key contract terms like exercise prices, exercise styles, and expiration dates.
At NYSE Amex Options, Index FLEX options are traded on any index upon which options currently trade. A minimum value of $10 million on the underlying index is required to open a new Index FLEX option series and a minimum of $1 million is required for an open series.
LEAPS Options
Long-term Equity AnticiPation Securities (LEAPS) are put and call options that have expirations of up to three years from the time of their initial listing. LEAPS, which have a unique ticker symbol, meld into their conventional shorter-term options within one year of their expirations.
At NYSE Amex Options, Equity LEAPS are traded on certain common stocks, American Depositary Receipts, exchange traded funds and HOLDRS, and Index LEAPS are traded on broad-based, industry sector and international indexes.
Equity LEAPs
Equity LEAPS are put and call options on selected common stocks, American Depositary Receipts, exchange traded funds and HOLDRS that have expirations of up to three years. These long-term options give holders the right to purchase (with calls) or sell (with puts) shares of an underlying stock at a specified price on or before a given date up to three years in the future. With the exception of their longer-term expiration, Equity LEAPS work in the same manner as other exchange-listed stock options, and may be exercised on any business day prior to expiration (American style).
Equity LEAPS series are introduced based on expiration cycles. Initial strike (exercise) prices are set at approximately 25 percent above, at and 20 percent below the underlying stock's price at the time of options' listing. This provides the versatility of in-, at- and out-of-the-money puts and calls.
LEAPS meld into their conventional shorter-term options within one year of expiration.
Index LEAPs
Index LEAPS are long-term options generally based on a reduced value of an underlying broad-based, industry sector or international index and have expirations of up to three years. With the exception of their longer-term expiration, Index LEAPS work in the same manner as all other broad-market index options with exercises only permitted on the last business day prior to expiration (European style) and settlement with the payment of cash, not the delivery of securities.
Index LEAPS series are introduced based upon exercise cycles. Two initial strike (exercise) prices are set bracketing the LEAPS' index value. New strike prices are introduced when the value of the index underlying the LEAPS moves 10 to 15 percent.
LEAPS meld into their conventional shorter-term options within one year of expiration.
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