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FLEX® Options Product Specifications


FLEX Equity Options | FLEX Index Options | FLEX U.S. Dollar-Settled Foreign Currency Options

FLEX® Equity Options

Underlying Security: Any security upon which options currently trade can be eligible.

Type of Option: Put or call.

Strike (Exercise) Prices: Call option strike prices may be set at standard intervals only. Put option strikes may be specified in terms of a specific dollar amount rounded to the nearest $.10 or a percentage of the underlying security rounded to the nearest tick or minimum increment. A strike price specified as a percentage will be rounded to the nearest eighth.

Expiration Date: Any business day up to three years from the trade date, except that a FLEX® option may not expire on any day that falls on or within two business days of a non-FLEX® option expiration date. For example, if Saturday, July 18, represents the expiration date for July equity options, FLEX® options may not be established to expire on Thursday, July 16, Friday, July 17, Monday, July 20 and Tuesday, July 21. Further, a FLEX® equity option may not be established to expire on the same day as the trade date.

Exercise Style: American or European.

Minimum Opening Transaction Size: If there is no open interest in the particular series when an RFQ is submitted, the minimum size of an RFQ is:

  • (i) $10 million underlying equivalent value, reflecting FLEX market index options, and $5 million underlying equivalent value reflecting FLEX industry index options; and
  • (ii) the lesser of 250 contracts or the number of contracts having $1 million of underlying equivalent value, with respect to FLEX equity options.

 

Minimum Closing Transaction Size: The lesser of 25 contracts and the remaining size.

Position and Exercise Limits: FLEX® equity options are not subject to a separate FLEX® position limit and positions in FLEX® equity options are not taken into account when calculating the position limits for non-FLEX® options. However, position limits which exceed three times the non-FLEX® position / exercise limit must be reported to the Exchange.

Settlement: Physical delivery.

FLEX® Index Options

Underlying Security: Any index upon which options currently trade. However, prior to requesting a quote for a particular index option, the requesting member should first determine whether that index has been listed for FLEX trading. Such lists will be posted at the Corrections Post.

Type of Option: Put or call.

Strike (Exercise) Prices: May be specified in terms of a specific index value number or a percentage of the index value calculated as of the open or close of trading on the Exchange on the trade date.

Expiration Date: Any business day up to five years from the trade date, except that a FLEX® option may not expire on any day that falls on or within two business days of an expiration date for a non-FLEX® option. Note that the restriction does not apply to quarterly expiring index option expiration dates. For example, if Saturday July 18, represents the expiration date for July index options, FLEX® options may not be established to expire on Thursday, July 16, Friday, July 17, Monday, July 20 and Tuesday, July 21. Further, a FLEX® option may not be established to expire on the same day as the trade date.

Exercise Style: American or European.

Minimum Opening Transaction Size: If there is no open interest in the particular series when a Request for Quote (RFQ) is submitted, the minimum size of an RFQ is $10 million underlying equivalent value for broad-based index options and $5 million for narrow-based index options. If a particular series has open interest then the minimum size to open is $1 million underlying equivalent value.

Minimum Closing Transaction Size: The lesser of $1 million underlying equivalent value and the remaining size.

Position and Exercise Limits: FLEX® index options are subject to a separate position limit of 200,000 contracts on the same side of the market respecting broad-based index options and 36,000, 48,000 or 60,000 contracts respecting narrow-based index options, depending on the position limit tier determined pursuant to Rule 1001A(b)(i). However, positions in p.m.-settled FLEX® options shall be aggregated with positions in quarterly expiring options listed pursuant to Rule 1101A(b)(iv) on the same underlying index, if the FLEX® index option series expires at the close of trading on or within two business days of the last day of trading in each calendar quarter. Positions in FLEX® index options shall otherwise not be taken into account when calculating position limits for non-FLEX® index options.

Settlement: Cash.

FLEX® U.S. Dollar-Settled Foreign Currency Options

Underlying Security: Any U.S. Dollar-Settled Foreign Currency upon which options currently trade can be eligible.

Type of Option: Put or call.

Strike (Exercise) Prices: Call and put strike price may be specified in terms of a specific dollar amount rounded to the nearest ten thousandth of a dollar (expressed without reference to the first two decimal places) for FLEX® currency options other than the Japanese yen currency option. FLEX® options on the Japanese yen may be specified in terms of a specific dollar amount rounded to the nearest one millionth of a dollar (expressed without reference to the first four decimal places).

Expiration Date: Any business day up to two years from the trade date, except that a FLEX® option may not expire on any day that falls on or within two business days of a non-FLEX® U.S. Dollar-Settled Foreign Currency option expiration date. For example, if Saturday, July 18, represents the expiration date for July equity options, FLEX® options may not be established to expire on Thursday, July 16, Friday, July 17, Monday, July 20 and Tuesday, July 21. Further, a FLEX® U.S. Dollar-Settled Foreign Currency option may not be established to expire on the same day as the trade date.

Exercise Style: European.

Minimum Opening Transaction Size: If there is no open interest in the particular series when an RFQ is submitted, the minimum size of an RFQ is 50 contracts.

Minimum Closing Transaction Size: The lesser of 25 contracts and the remaining size.

Position and Exercise Limits: FLEX® U.S. Dollar-Settled Foreign Currency options will be aggregated with positions in non-FLEX® U.S. dollar-settled FCO contracts, as well as physical delivery FCO contracts, for purposes of determining compliance with the position limits established by PHLX Rule 1001.

Settlement: Cash settlement in U.S. dollars.

Trading Method: The PHLX XL trading system is not available for FLEX® options. All FLEX® options must be quoted and traded in the trading crowd of the corresponding non-FLEX® options. Quoting and trading in FLEX® currency options will be subject to Rule 1079(b), which currently governs the quoting and trading of FLEX® index and equity opitons. Rule 1079(c), which governs who may trade FLEX® options, will apply to FLEX® currency options in the same manner as FLEX® index and equity options. In addition, crossing in FLEX® currency opitons will be governed by Rule 1079(b)(6), which currently applies to crosses in FLEX® index and equity options.