Trade The Expected And The Unexpected With Cboe's XSP Option Contracts

Cboe Global Markets’ CBOE Mini-SPX Option Contract (XSP) tracks the S&P 500 Index and is one-tenth the size of standard SPX options. XSP options grant investors unparalleled access to the options market and benefits like better tax treatment and global trading hours. 

One of the greatest benefits of XSP is its ability to allow investors to trade both expected and unexpected events due to XSP’s highly-customizable and flexible expiration dates. For example, on days when major economic news is due, traders can utilize XSP options that expire same day to trade expected price fluctuations in the SPX Index. These market-moving expected events occur more than some people may think. FOMC meetings, CPI reports, non-farm payrolls, the unemployment rate and retail sales are some events that occur monthly and can have an influence on the market's price. 

Alternatively, traders can use XSP's longer expiry dates to trade the long-term effects of some of the market's surprises. The Covid-19 pandemic, for example, generated plenty of opportunities – both long and short – for investors in that specific time period, and the volatility that ensued could potentially have generated significant profits for the individual investor. In fact, hedge funds performed exceptionally well during this time. XSP's utility can be extended onto many other surprise market events, most recently SVB's collapse. 

With XSP weekly options available Monday through Friday, traders can trade these options on a daily basis. Whether hedging against losses or generating alpha, XSP can help serve an investor's goals in whichever form they arise at a fraction of the cost of traditional contracts. 

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