Understanding SPXW Options: A Weekly S&P 500 Analysis

Table of Contents

• What are SPXW options?
• Why trade SPXW Options?
• What is the difference between SPX and SPXW CBOE?
• Do SPX options trade pre market?
• What happens if I let SPX options expire?
• How to trade SPXW Options with MarketXLS?
• Steps to Trade SPXW Options with MarketXLS
• Additional Tools
• Summary

SPXW options are weekly options on the S&P 500 Index. They are European-style, meaning they can only be exercised at expiration. SPXW options are designed to expire at the end of the trading week, offering traders and investors a flexible tool to manage short-term market exposure.

What are SPXW options?

SPXW options are short-term options on the S&P 500 Index. These are offered by the Chicago Board Options Exchange. They have different expiration dates, such as weeklies or end-of-month (EOM). The “W” in SPXW stands for weeklies. However, unlike standard options that expire on the third Friday of every month, these can expire any Friday. They provide a great tool for investors wishing to make specific short-term investments or hedge against other investments. These options are cash-settled. They can only be exercised on their expiration date.

Why trade SPXW Options?

Trading SPXW Options can provide numerous advantages. They offer more flexibility with different expiration dates. Also, the contracts are cash-settled, eliminating the need for physical delivery. This feature reduces the risk of default. Additionally, they are European style options; this means they can only be exercised at expiration, curtailing surprise assignment risks. Moreover, the product’s large size makes it a cost-effective choice for institutional investors. Lastly, SPXW Options also offer traders tax benefits as they qualify for a 60/40 tax treatment in the U.S.

What is the difference between SPX and SPXW CBOE?

SPX and SPXW are both indexes listed by the Chicago Board Options Exchange (CBOE). The key difference lies in their expiration dates. SPX options have monthly expirations, typically on the third Friday of each month. On the other hand, SPXW options have weekly expirations, i.e., they expire every week, usually on Fridays. This difference allows investors more flexibility. SPXW can be more appealing to those who want to make short-term investments, while SPX can be for the longer term.

Do SPX options trade pre-market?

The trading of SPX options is strictly regulated to adhere to certain trading hours. It is important to note that SPX options do not trade pre-market. The standard trading hours for SPX options are from the market open at 9:30 AM Eastern Time until the market closes at 4:00 PM Eastern Time. Therefore, any trade activity outside these prescribed times, like pre-market and after-hours trading, is not permissible. Any orders placed at these times will be queued for the next trading session.

What happens if I let SPX options expire?

If you let your SPX options expire, you have neither sold nor exercised your options. As SPX options are European style, they only can be exercised on expiration day. If the SPX options are in the money at expiry, they will automatically exercise. You will receive a cash settlement for the difference between the strike and final settlement prices. If they are out of the money, they will expire worthless and disappear from your account. Always remember to consider exit strategies before your options expire to avoid unintended financial consequences.

How to trade SPXW Options with MarketXLS?

To trade SPXW options using MarketXLS, you can utilize different functions available within the software to configure and execute these trades. Here’s a step-by-step guide to help you through the process:

Steps to Trade SPXW Options with MarketXLS

1. Fetch Option Chain:
   • Use the function=QM_GetOptionChain(“SPXW”)Prefix “=mxls.” for Excel Online, and Excel on MACto retrieve the option chain for SPXW. This function fetches all trading or recently expired contracts of a stock, providing you with the necessary data to make informed decisions.
2. Analyze Greeks and Market Statistics:
   • To get detailed information, including option Greeks, you can use=QM_GetOptionQuotesAndGreeks(“SPXW”)Prefix “=mxls.” for Excel Online, and Excel on MAC. This provides delta, gamma, theta, vega, and more for each option, which are essential for formulating your strategy.
   • You can also use=QM_GetOptionMarketStats(“SPXW”)Prefix “=mxls.” for Excel Online, and Excel on MACto get market statistics for options expiring within the week .
3. Execute Trades:
   • For single-leg trades: Use the function=TradeSingleLegTradier(“option”,”SPXW”,quantity,”buy/sell”,”market/limit”,”day/good till cancelled”)Prefix “=mxls.” for Excel Online, and Excel on MAC. This places single-leg trades on the Tradier platform using the provided configurations .
   • For multi-leg trades: Use the function=TradeMultiLegTradier(“market”,”day”,OptionSymbol(“SPXW”,expiry_date,”C/P”,strike_price),order_qty,”buy/sell”). This allows you to create complex multi-leg strategies and execute them directly .
4. Track and Analyze:
   • For real-time tracking and Greeks, use functions such as=QM_Stream_Delta(“SPXW”)Prefix “=mxls.” for Excel Online, and Excel on MACfor real-time delta or=QV_Stream_TradeCount(“SPXW”)Prefix “=mxls.” for Excel Online, and Excel on MACfor the number of trades in the last tick data .
   • You can also utilize historical implied volatility and open interest scanning functions like=opt_ImpliedVolatilityHistorical(“SPXW”,date)Prefix “=mxls.” for Excel Online, and Excel on MACand=opt_UnusualOptionOIScanEOD()Prefix “=mxls.” for Excel Online, and Excel on MACto enhance your analysis.

Additional Tools

• Options Profit Calculator:
  • Access the Options Profit Calculator, a web-based tool integrated with MarketXLS, to estimate potential profits or losses considering factors like underlying stock price, strike price, and option expiration date.

By following these steps and utilizing the provided functions and tools within MarketXLS, you can effectively trade SPXW options and use the software’s analytical capabilities to make informed trading decisions.

For further assistance or specific queries, you may contact support@marketxls.com.

Summary

SPXW options are short-term on the S&P 500 Index, offered by the Chicago Board Options Exchange. They allow for short-term investments, are cash-settled, and can be exercised only on their expiration date. SPX and SPXW differ in their expiration dates, with SPXW expiring weekly and presenting more flexibility. SPX options don’t trade pre-market, only during regular trading hours. If they expire and are in the money, they automatically exercise and provide a cash settlement.