PHLX Sector Index Options Contract Specifications
PHLX Gold/Silver Sector SM (XAU SM )
The PHLX Gold/Silver Sector SM (XAU SM ) is a capitalization-weighted index composed of 16 companies involved in the gold and silver mining industry. XAU was set to an initial value of 100 in January 1979; options commenced trading on December 19, 1983.
Trading Symbol: XAU
Settlement Value Symbol: XAG
CUSIP® Number: 693327
Exercise Style: American - may be exercised on any business day before the expiration date.
Expiration Date: Saturday following the third Friday of the expiration month.
Expiration Cycle: Three months from the March, June, September, December cycle plus two additional near-term months (five months at all times).
Settlement Value for Expiring Contracts: Based on the closing prices of the component stocks on the last trading day prior to expiration (usually a Friday).
Last Trading Day for Expiring Contracts: The last business day (usually a Friday) prior to expiration.
Index Multiplier: $100 (i.e. one contract = index value x 100)
Index Value Calculation:
Total Capitalization of Assigned Shares
Base Market Divisor
Exercise (Strike) Price Intervals: The Exchange shall determine fixed-point intervals of exercise prices for index options. Generally, the exercise (strike) price intervals will be no less than $5. However, the
Exchange may determine to list strike prices at no less than $2.50 intervals if the strike price is less than $200 for listed indexes, and in response to demonstrated customer interest or specialist request.
Premium Quotation: One point = $100. Thus a premium quote of 2 is $200. The minimum change in a premium under 3 is $5.00 and the minimum change in a premium of 3 or greater is $10.00.
Position Limits: 94,500 contracts on the same side of the market. Hedge exemptions are available.
Margin: Uncovered writers must deposit 100% of the option proceeds plus 20% of the aggregate contract value (current index level multiplied by $100) minus the amount by which the option is out-of-the-money, if any. Minimum margin is 100% of the option proceeds plus 10% of the aggregate contract value. Long puts or calls must be paid for in full.
Trading Hours: 9:30 a.m. to 4:00 p.m. EST
Issuer and Guarantor: The Options Clearing Corporation (OCC)
An investor interested in capitalizing on an anticipated surge in gold stocks purchases 10 at-the-money XAU July 95 calls at 6½ ( 10 x $6.50 x 100 = $6,500) in February. At July expiration, the XAU has risen to a value of 145, yielding the investor $43,500.Source: www.nasdaqtrader.com