How do broad-based indexes like the SPX and RUT settle and expire?
We only open trades on the SPX and RUT indexes using weekly options where they settle on the day of expiration at the end of the trading day. These are called PM settled options. These are the best options to trade as they are PM settled. Alternatively, the traditional monthly options that expire on the 3rd Friday of each month settle in a different way, called AM settled. MCTO decided in 2014 to no longer open trades on the monthly options as they were becoming too dangerous to hold through the AM settlement process. We now only trade weekly options.
How do broad-based indexes like the SPX and RUT settle and expire?
We only open trades on the SPX and RUT indexes using weekly options where they settle on the day of expiration at the end of the trading day. These are called PM settled options. These are the best options to trade as they are PM settled. Alternatively, the traditional monthly options that expire on the 3rd Friday of each month settle in a different way, called AM settled. MCTO decided in 2014 to no longer open trades on the monthly options as they were becoming too dangerous to hold through the AM settlement process. We now only trade weekly options.
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