Is the settlement for S&P 100 options American-style or European-style?
Prior to 2001, S&P 100 options were American-style only. This means they can be exercised on any business day prior to expiration date. However, most other index options are European-style, meaning that they may be exercised only during a specified period of time just prior to its expiration. In 2001 the CBOE introduced European-style S&P 100 options (XEO), so that customers will be offered both American- and European-style S&P 100 options. S&P 100 options, available in each of the four nearby months, expire on a monthly basis. The expiration date is the Saturday following the third Friday of the expiration month. Settlement value is tied to the S&P 100 at expiration or to the value of the Index when the option is exercised. This value is calculated by Standard and Poor’s. OEX options are cash-settled. This means that cash is delivered at settlement, not securities.
