Index options make it possible for investors to "trade" an entire market to seek either profit or protection from price movements in a stock market as a whole or in broad segments of a particular market.
Options on ETFs operate the same as individual equity options. They offer the efficiency of ETFs with the flexibility of options and allow investors to:
Equity options, which are the most common type of equity derivative, give an investor the right but not the obligation to buy or sell a call or put at a set strike price prior to the contract’s expiry date.
Options on ETFs allow investors to gain exposure to the performance of an index, hedge against a decline in assets, enhance portfolio returns, and/or profit from the rise or fall of a leveraged ETF.
FLEX and LEAPS options offer investors increased flexibility in terms of contract customization (such as expiration date, exercise style, and exercise price) and time frame (with expirations of up to three years out).
Equity options, which are the most common type of equity derivative, give an investor the right but not the obligation to buy or sell a call or put at a set strike price prior to the contract’s expiry date.
Options on ETFs allow investors to gain exposure to the performance of an index, hedge against a decline in assets, enhance portfolio returns, and/or profit from the rise or fall of a leveraged ETF.
FLEX and LEAPS options offer investors increased flexibility in terms of contract customization (such as expiration date, exercise style, and exercise price) and time frame (with expirations of up to three years out).