Cboe Global Markets, Inc., a leading derivatives and securities exchange network, today announced the introduction of enhanced margin treatment for cash-settled index options.
Cboe’s margin relief rule aims to provide greater capital efficiencies for traders and reflects its ongoing commitment to advocating for smart and responsive market structure enhancements that meet the evolving needs of its customers.
Cboe’s margin relief rule offers enhanced margin treatment when writing, or selling, a cash-settled index option in a margin account against an exchange-traded fund (ETF) that is based on the same underlying index. In the same way an investor can write an equity call option while holding a long position in the underlying security (i.e., a “covered” call), Cboe’s rule change allows for writing of index options in a similar manner.
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