Asset and Index Options

Options on stocks, ETFs, indexes, currencies, volatility measures, commodities, and other underlyings can use different settlement and contract terms.

Asset and index options apply the same call-and-put framework to different underlyings, but the resulting contracts are not interchangeable. An option on an individual stock can deliver shares after exercise, while a broad index option can settle in cash using a calculated index value. Currency, volatility, commodity, and futures options add their own quoting, settlement, and expiration conventions.

Use Equity Option for listed calls and puts on individual stocks or exchange-traded products. Use an index-specific page when the underlying is a calculated equity or volatility index rather than transferable shares. The parent Underlying Assets, Indexes, and Rate Options branch covers the broader instrument map.

Compare the Underlying and Settlement

Option typeUnderlying or referenceCommon settlement questionMain evidence to check
Equity optionIndividual stock, ETF, ETN, or similar equity securityAre shares delivered, and is the contract adjusted?Option series, multiplier, deliverable, exercise style, and OCC memo
Index optionCalculated equity indexIs settlement in cash, and which opening or closing index value applies?Product specification, settlement symbol, multiplier, and expiration procedure
Currency optionExchange rate or currency amountIs delivery physical or cash-settled, and how is the rate quoted?Currency pair, notional, premium currency, settlement, and venue
VIX optionVIX index methodology and related forward expectationsWhich special opening quotation determines settlement?Contract specification, expiration calendar, settlement value, and multiplier
Commodity or futures optionCommodity price or futures contractDoes exercise create a futures position rather than physical commodity delivery?Underlying futures month, option expiration, exercise, and futures margin terms
Interest-rate optionRate, yield, bond, or rate-linked instrumentIs payoff based on price, yield, rate, or cash settlement?Reference rate, notional, day count, strike convention, and settlement formula

Why the Distinction Matters

  • Exercise can create different positions. A stock call can produce shares; an option on futures can produce a futures position; an index option can produce cash.
  • Expiration values can be calculated differently. Some products use opening values, closing values, or special settlement calculations.
  • Multipliers and notionals differ. A quoted premium cannot be converted into cash exposure without the contract multiplier.
  • Corporate actions affect equity contracts. Splits, mergers, spinoffs, and distributions can change a stock option’s deliverable.
  • Trading hours and final trading dates vary. The last opportunity to trade can precede the value used for settlement.
  • Exercise styles vary by product. American, European, and other exercise conventions are contract terms, not geographic labels.

What to Verify

  1. Identify the exact underlying, reference index, futures month, or currency pair.
  2. Confirm call or put, strike, expiration, exercise style, and multiplier.
  3. Determine whether settlement delivers shares, currency, futures, another asset, or cash.
  4. Review the final trading day, exercise cutoff, and settlement-value methodology.
  5. Check whether the contract has been adjusted after a corporate action.
  6. Evaluate premium risk, writer obligations, margin, assignment, liquidity, and basis risk.

These pages are educational and do not recommend an option, strategy, broker, account type, or risk level. Contract specifications and the current options disclosure document control the actual rights and obligations.

In this section

Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.

Currency Option

A currency option gives its holder the right to exchange one currency for another at a specified rate while limiting the buyer's loss to the premium.

Equity Option

An equity option is a call or put whose underlying is an individual stock, ETF, or other exchange-traded equity security.

VIX Options

VIX options are cash-settled calls and puts on the Cboe Volatility Index framework whose expiration value is determined by a special VIX quotation.

Rate Options
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