Index options give you exposure to the securities comprising a sharemarket index.

They offer you similar flexibility to that provided by options over individual stocks, while allowing you to trade a view on the market as a whole, or on the market sector covered by the particular index.

While the value of a share option varies according to movements in the value of the underlying shares, an index option varies according to movements in the underlying index.


Underlying asset ASX approved indices (currently the S&P/ASX 200 Index) 
Exercise style European
Settlement Cash settled based on the opening prices of the stocks in the underlying index on the morning of the last trading date.
Expiry day The third Thursday of the month, unless otherwise specified by ASX.
Last trading day Trading will cease at 12 noon on expiry Thursday. This means trading will continue after the settlement price has been determined.
Premium Expressed in points
Strike price Expressed in points
Index multiplier A specified number of dollars per point e.g. AUD $10
Contract value The exercise price of the option multiplied by the index multiplier

Some of the differences between index options and options over securities are:

  • Index options are cash settled.
  • Index options are European in exercise style. This means the holder can only exercise an index option on the expiry day.
  • The strike price and premium of an index option are expressed in points. A multiplier is then applied to give a dollar figure.

Index options are cash settled

The settlement amount is based on the opening prices of the stocks in the underlying index on the morning of the maturity date. As the stocks in the relevant index open, the first traded price of each stock is recorded. Once all stocks in the index have opened, an index calculation (the Opening Price Index Calculation (OPIC)) is made using these opening prices.

Options are currently available over the following ASX indices:

  • S&™/ASX 200™ Index - code XJO

Benefits of index options

  • The ability to trade all the stocks in an index with just one trade.
  • Investing in index options approximates trading a share portfolio that tracks that particular index. By using options over an index, you can trade a view on the general direction of the market with just one trade. For example, if you are bullish on the market, you could buy a call option over an index. This gives you exposure to the broader market which the index represents, without having to choose a particular stock.
  • Leverage - index options, like ordinary options, provide leveraged profit opportunities. When the market rises (or falls), percentage gains (or losses) are greater than rises (or falls) in the underlying index.
  • Protection for a share portfolio - when you buy shares you are exposed to two types of risk:
    1. Company risk - the risk that the specific companies you have bought into will underperform.
    2. Market risk - the risk that the whole market underperforms, including your shares.
  • You can protect your shares against market risk by buying an index put option. If your bearish market view proves correct, the profits on your put option will at least partly compensate you for the loss of value in the stocks in your portfolio.
  • Low trading costs - since the amount of capital outlaid in an option trade is usually much lower than that involved in a share transaction providing similar market exposure, brokerage costs are often lower in option trades. 

For more information on index options, please refer to the ASX explanatory booklet Understanding Options Trading (PDF 1.2MB)

Find out more about indices.

Find out more about SPI 200 Index Options.

Find out more about index strategies.

Download the Index Options brochure (PDF 157KB).

ASX200™ is a trade mark of ASX Operations Pty Ltd, ABN 42 004 523 782, a member of the Australian Stock Exchange Group of companies. S&P™ is a trade mark of Standard & Poor's, a division of The McGraw-Hill Companies, Inc