S&P 500 Quarterly Dividend Index options

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On March 5,2010, CBOE began trading in S&P 500 Quarterly Dividend Index options (ticker symbol -DVS) with a quarterly "accrual period," for market users with quarterly dividend exposures. DVS was the first CBOE dividend index contract of its kind in the U.S.

The S&P 500 Quarterly Dividend Index options contract was designed for customers who are accustomed to looking at dividend movements on a quarter-by-quarter basis (versus CBOE's other dividend index -- S&P 500 Annual Dividend Index Options, for customers who are more focused on annual movement).

S&P 500 Quarterly Dividend Index options contracts provide direct exposure to the dividend risk of the S&P 500 index. The option allow investors to capture the difference between forward implied dividends, the market's best estimate of future dividend payments, and realized dividends - the dividends that are actually paid over those periods.

The dividend index, calculated by Standard & Poor's, reflects ordinary cash dividends for corporations comprising the S&P 500 Index over a quarterly accrual period. It is calculated using the same set of component securities, same shares outstanding, same capitalization-weighting methodology and same index divisor as are used to calculate the S&P 500 Index.

For DVS, the quarterly accrual period runs from the business day after the March, June, September or December expiration through the third Friday of the next quarterly expiration month. At the end of the each accrual period, the Index is reset to zero, and a new accrual period begins.

For additional information on S&P 500 Quarterly Dividend Index options, including contract specifications, price charts, ticker symbols and frequently-asked questions, see www.cboe.com/DVS.


Resources

"How S&P 500® Dividend Index Options Could Pay Dividends for Stock Portfolios [1] -- social media release, David Blitzer, Standard and Poor's, and William Speth, CBOE, March 8, 2010)


References

[Category:CBOE Options]]