SPX vs SPXW Options Underlying Symbol
As new options traders begin to learn about index options, the historic confusion regarding SPX vs SPXW options is something almost all traders will run into. The underlying symbol for both SPX and SPXW options is SPX, the symbol for S&P 500 index. This means that at your broker’s website or using the Market Data API or Sheets Add-on, you would use the symbol SPX to consult the entire option chain. If you are using Google Finance to find the SPX ticker, the symbol is slightly different. The difference in the option symbol indicates the settlement differences in the contracts themselves and this is what can create confusion for investors trading SPX options for the first time.
For example, on May 17, 2024 there are two $5000 call options: SPX240517C05000000 and SPXW240517C05000000. The slight differences in these two contracts’ settlement are explained below:
SPX vs SPXW Options Settlement
SPX options are AM-settled options that expire monthly on the third Friday. SPXW options are weekly (and daily) options that expire after market close (PM-settled). On the AM-settled options, the last day of trading is the Thursday before the expiration date. These options will use Friday’s opening price for settlement. On the PM-settled options, you can trade them up until the market closes on expiration day. They’ll use the closing price for settlement. This means the AM-settled SPX options have some additional overnight volatility on the last trading day. This can be positive or negative, depending on the trading strategy you are employing.
| SPX | SPXW | |
|---|---|---|
| Last Trading Day | Day Before Expiration | Day of Expiration |
| Settlement Time | AM (Opening Price) | PM (Closing Price) |
| Tradable on Expiration Day | No | Yes |
| Settlement Date | Third Friday of the Month | Monday – Friday |
| Settlement Symbol | SET 4:15 p.m.-5:00 p.m | SPX |
SPX vs SPXW Trading Hours
SPX and SPXW options trade nearly 24×5, meaning you can trade them almost 24 hours a day during weekdays. Some brokers do not support extended hours trading, so consult with your broker if they support the extended sessions.
| SPX | SPXW | |
| Regular Session | 9:30 AM – 4:15 PM (Normal days) 9:30 AM – 4:00 PM (Thursday before expiration) |
9:30 AM – 4:15 PM (Normal days) 9:30 AM – 4:00 PM (Day of expiration) |
|---|---|---|
| Curb Session | 4:15 PM – 5:00 PM | 4:15 PM – 5:00 PM |
| Global Trading Hours (overnight session) | 8:15 PM – 9:15 AM | 8:15 PM – 9:15 AM |
The most important point to note here is that SPXW options continue to expire at 4:00 PM on their expiration day. Even though global trading hours and a curb session have been added to SPX and SPXW option trading, SPXW options will always expire at 4:00 PM on their expiration day.
Frequently Asked Questions
Here are some FAQs that may help gain an additional understanding.
Why do SPX options use both SPX and SPXW as root symbols?
This is mainly a holdover from before the 2010 symbol change. The OCC changed all option symbols in 2010 to the format used today and some of the previous conventions were preserved, such as the use of SPXW for weekly options. In reality, the SPX today has expirations on an almost daily basis, but the SPXW root symbol is still used.
What is the tax treatment for SPX vs SPXW options?
Both SPX and SPXW options are considered Section 1256 contracts and have advantageous capital gains tax treatment in the United States. This is not the same with SPY options. However, there is no difference between SPX and SPXW when taxes are concerned. Both will provide advantageous capital gains treatment.
What does it mean that SPX is a “European-style” option?
Since both SPX and SPXW options are European-style options, this means they are cash-settled at the expiration date and cannot be exercised early. At expiration time, you don’t actually take delivery of any underlying security. Instead, you are paid (or forced to pay) the difference between the option’s strike price and the underlying index. This is different from SPY options, for example, where the underlying ETF is actually transferred between option-holders at expiration.
What are the settlement symbols for SPX and SPXW?
Settlement symbols are used to inform the official closing price of the index for the purposes of reconciling the cash-payments between option buyer and option seller. For SPX options use the SET ticker to obtain the AM settling price of the SPX index options. For SPXW options, use the SPX ticker to obtain the PM settling price of the SPX index.
Why do SPX and SPXW use settlement symbols instead of the open/close prices of the index?
Why don’t they just use the index opening/closing prices? The answer is that the option contract specifications calculate opening prices differently than the index itself. This can be troublesome, but since this is the way it is done, the settlement symbols are necessary if you take an AM option through expiration and you want to know how much you’re getting paid (or have to pay).
The official word from CBOE regarding the calculation of settlement prices:
The exercise-settlement value, SET, is calculated using the opening sales price in the primary market of each component security on the expiration date.
SPXW options are more straightforward since they use the SPX index closing price to calculate the settlement value.
Is SPX the only index that has multiple root tickers for its options?
No. In fact, Russell 2000 Index Options and Nasdaq 100 Index Options also change root tickers depending on whether the expirations are AM/PM or weekly/monthly.
