FLexible EXchange (FLEX) options are designed to extend investor access to customized derivative products. FLEX options combine the benefits of contract customization with the advantages of listing and can provide investors with:
FLEX Trades are permissible on options classes not listed on the NYSE options markets but require certification with the OCC on the day before the FLEX trade is executed. Cut off time for certification by the exchange is 12:00 Noon ET. Therefore, all requests to trade FLEX options on non-American/Arca Options must be submitted before 11:30am on the day before the expected trade date.
To request an underlying to be qualified as FLEX eligible, submit a request to the relevant NYSE options markets:
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. Equity FLEX options are traded on all listed options, including but not limited to, Stock Options, American Depository Receipts (ADRs) and exchange traded funds (ETFs).
A minimum 1 contract is required to open a new Equity Flex Option Series. For closing transactions the minimum is also 1 contract.
Index-FLEX options may be traded on any multiply listed index upon which options trade.
A minimum 1 contract is required to open a new Index Flex Option Series.
For select eligible issues, the Exchange offers settlement style ‘cash’ (physical) as a Flexible term. To qualify, the underlying security must have an average daily notional value of $500 million or more and a national average daily volume of at least 4,680,000 shares (measured over the prior 6-month period each calendar year). If an underlying ETF ceases to satisfy the criteria, any new position overlying the ETF will only settle by physical delivery, and any open cash-settled FLEX ETF Option positions may be traded only to close the position.
Current Cash-Settled FLEX ETF Options Eligible Issues can be found here. Additional details can be found here.
In addition to FLEX options, NYSE American Options and NYSE Arca Options trades Long-term Equity AnticiPation Securities (LEAPS), which are long-dated options that have expirations of up to three years from the time of their listing.
LEAPS may be traded on equity and index options classes which are listed on the NYSE options markets. A class must have a three-month average daily volume of at least 1,000 contracts to be eligible for LEAPS.
Equity-LEAPS allow investors to benefit from the upward, or downward, movement of a stock without making an outright purchase. On NYSE options markets, Equity-LEAPS are traded on selected common stocks, ADRs and ETFs that have expirations of up to three years.
Series are introduced based on expiration cycles. Initial exercise prices are set at approximately 25% above and 20% below the underlying stock’s price at the time of the options’ listing.
Index-LEAPS are traded on broad-based, industry sector and international indices. With the exception of their longer term expiration, they work in the same way as other index options: exercise is permitted only on the last business day before expiration and settlement is with the payment of cash.
Series are introduced based on exercise cycles. Two initial exercise prices are set bracketing the LEAPS’ index value. New exercise prices are introduced when the value of the underlying index moves between 10% and 15%.
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.
Index options make it possible for investors to seek either profit or protection from price movements in a market as a whole or in broad segments of a particular market.
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.
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.
Index options make it possible for investors to seek either profit or protection from price movements in a market as a whole or in broad segments of a particular market.
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.