How to Place an Index Option Trade

What's an index option?

An index option is a contract itself. It's different from equity options mainly because it's based on a stock market index, such as the S&P 500 index or Nasdaq 100 index. Although it has a strike price, holders don't have to buy or sell any underlying stocks if they choose to exercise. It is settled in cash and usually exercised European style, which means holders can only settle on the date of maturity.

‌

‌

Step 1 Go to the index option details page

Step 2 Tap Options

Step 3 View Options Chain

Note: Contracts without "AM" labels are PM-settled by default.

The AM settlement price is based on the set price which is calculated after the market open on the day of expiration；The PM settlement price is based on the closing market price on the expiration date.

Step 4 Select an Option Strategy and Side

Step 5 Click a contract to trade

You can change the option’s strategies, side, exercise price and expiration date. Also, you can check the risk chart here.

Step 6 Submit Your Order

Step 7 Confirm Your Order

‌

Step 8 Congratulations! You have successfully submitted an index option order!

‌

‌