The NYSE Amex Options trades conventional put and call options on exchange traded funds (ETFs) as well as LEAPS (Long-term Equity AnticiPation Securities) on a number of ETFs. ETFs are index funds or trusts that are traded intraday on an exchange. ETFs enable investors to buy or sell shares of an entire stock portfolio in a single security.
Exchange-traded funds are index funds or trusts that are traded intraday on an exchange. They allow an investor to buy or sell shares of an entire stock portfolio in a single security.
Options on ETFs operate the same as individual equity options. They offer the efficiency of ETFs with the flexibility of options and allow investors to:
Gain exposure to the performance of an index;
Hedge and hence protect a portfolio against a decline in assets;
Enhance returns on a portfolio;
Profit from the rise or fall of an ETF by taking advantage of leverage.
ETF options are standardized put and call options on underlying ETFs. Minimum trade size is one option contract, with each contract representing 100 shares of the underlying ETF.
For more information, please see ETF option specifications.