Stock market index option

Stock market index option is a derivative financial insttrument.

The global market for exchange-traded stock market index options is notionally valued by the Bank for International Settlements at $368,900 million in 2005. The Bank for International Settlements (or BIS) is an International organization of Central banks which "fosters international monetary and A stock index option provides the right to trade a specific stock index at a specified price by a specified expiration date. A call option on a stock index gives you the right to buy the index, and a put option on a stock index gives you the right to sell the index. Example of a call option on a stock Buy a call The buyer expects that the price may go up A stock market index is a method of measuring a section of the Stock market. Options on stock indexes are similar to exchange-traded funds (ETF's), the difference being that ETF's values change throughout the day whereas the value on stock index options change at the end of each trading day. An exchange-traded fund (or ETF) is an investment vehicle traded on Stock exchanges much like Stocks.

See also