FLEX® Options on PHLX

FLEX Options offer the newest in risk management instruments, especially designed to extend investor access to customized derivative products. With FLEX Options, clients can customize equity options to fit specific investment strategies and goals.

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  • Institutional Asset Managers
  • Retail Investors
  • Traders
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FLEX® Equity Options

PHLX allows on the floor FLEX Options, or Flexible Exchange Offers with negotiable exercise style, strike price, expiration date, as well as other features and benefits.

Underlying Security: Any security upon which options currently trade can be eligible.

Type of Option: Put or call.

Strike (Exercise) Prices: Call option strike prices may be set at standard intervals only. Put option strikes may be specified in terms of a specific dollar amount rounded to the nearest $.10 or a percentage of the underlying security rounded to the nearest tick or minimum increment. A strike price specified as a percentage will be rounded to the nearest eighth.

Expiration Date: Any month, business day and year within three years for FLEX equity options, provided, however, that a Requesting Member may request a longer term to a maximum of five years, and upon the assessment of the Regulatory staff that sufficient liquidity exists among FLEX equity participants, such request may be granted. Regulatory staff are Exchange employees responsible for, among other things, assessing that sufficient liquidity exists among FLEX equity participants requesting a term exceeding three years to a maximum of five years. The Exchange may also designate other qualified Exchange employees to assist the Regulatory staff as the need arises.

Exercise Style: American or European.

Minimum Opening Transaction Size: If there is no open interest in the particular series when an RFQ is submitted, the minimum size of an RFQ is:

(i) $10 million underlying equivalent value, reflecting FLEX market index options, and $5 million underlying equivalent value reflecting FLEX industry index options; and

(ii) the lesser of 250 contracts or the number of contracts having $1 million of underlying equivalent value, with respect to FLEX equity options.

Minimum Closing Transaction Size: The lesser of 25 contracts and the remaining size.

Position and Exercise Limits: FLEX® equity options are not subject to a separate FLEX® position limit and positions in FLEX® equity options are not taken into account when calculating the position limits for non-FLEX® options. However, position limits which exceed three times the non-FLEX® position / exercise limit must be reported to the Exchange.

Settlement: Physical delivery.             

FLEX® Index Options

PHLX allows on the floor FLEX Options, or Flexible Exchange Offers with negotiable exercise style, strike price, expiration date, as well as other features and benefits.

Underlying Security: Any index upon which options currently trade. However, prior to requesting a quote for a particular index option, the requesting member should first determine whether that index has been listed for FLEX trading. Such lists will be posted at the Corrections Post.

Type of Option: Put or call.

Strike (Exercise) Prices: May be specified in terms of a specific index value number or a percentage of the index value calculated as of the open or close of trading on the Exchange on the trade date.

Expiration Date: Any month, business day and year within five years for FLEX index options and within three years for FLEX currency options, except that (i) a FLEX index option that expires on or within two business days prior or subsequent to a third Friday-of-the-month expiration day for a non-FLEX option (except quarterly expiring index options) or underlying currency may only have an exercise settlement value on the expiration date determined by reference to the reported level of the index as derived from the opening prices of the component securities ("a.m. settlement") and (ii) all FLEX currency options will expire at 11:59 p.m. eastern time on their designated expiration date.

Exercise Style: American or European.

Minimum Opening Transaction Size: If there is no open interest in the particular series when a Request for Quote (RFQ) is submitted, the minimum size of an RFQ is $10 million underlying equivalent value for broad-based index options and $5 million for narrow-based index options. If a particular series has open interest then the minimum size to open is $1 million underlying equivalent value.

Minimum Closing Transaction Size: The lesser of $1 million underlying equivalent value and the remaining size.

Position and Exercise Limits: FLEX® index options are subject to a separate position limit of 200,000 contracts on the same side of the market respecting broad-based index options and 36,000, 48,000 or 60,000 contracts respecting narrow-based index options. However, positions in p.m.-settled FLEX® options shall be aggregated with positions in quarterly expiring options listed pursuant to Rule 1101A(b)(v) on the same underlying index, if the FLEX® index option series expires at the close of trading on or within two business days of the last day of trading in each calendar quarter. Positions in FLEX® index options shall otherwise not be taken into account when calculating position limits for non-FLEX® index options.

Settlement: Cash.

FLEX® U.S. Dollar-Settled Foreign Currency Options

PHLX allows on the floor FLEX Options, or Flexible Exchange Offers with negotiable exercise style, strike price, expiration date, as well as other features and benefits.

Underlying Security: Any U.S. Dollar-Settled Foreign Currency upon which options currently trade can be eligible.

Type of Option: Put or call.

Strike (Exercise) Prices: Call and put strike price may be specified in terms of a specific dollar amount rounded to the nearest ten thousandth of a dollar (expressed without reference to the first two decimal places) for FLEX® currency options other than the Japanese yen currency option. FLEX® options on the Japanese yen may be specified in terms of a specific dollar amount rounded to the nearest one millionth of a dollar (expressed without reference to the first four decimal places).

Expiration Date: Any month, business day and year within five years for FLEX index options and within three years for FLEX currency options, except that (i) a FLEX index option that expires on or within two business days prior or subsequent to a third Friday-of-the-month expiration day for a non-FLEX option (except quarterly expiring index options) or underlying currency may only have an exercise settlement value on the expiration date determined by reference to the reported level of the index as derived from the opening prices of the component securities ("a.m. settlement") and (ii) all FLEX currency options will expire at 11:59 p.m. eastern time on their designated expiration date.

Exercise Style: European.

Minimum Opening Transaction Size: If there is no open interest in the particular series when an RFQ is submitted, the minimum size of an RFQ is 50 contracts.

Minimum Closing Transaction Size: The lesser of 25 contracts and the remaining size.

Position and Exercise Limits: FLEX® U.S. Dollar-Settled Foreign Currency options will be aggregated with positions in non-FLEX® U.S. dollar-settled FCO contracts, as well as physical delivery FCO contracts, for purposes of determining compliance with the position limits established by PHLX Rule 1001.

Settlement: Cash settlement in U.S. dollars.

Trading Method: The PHLX XL trading system is not available for FLEX® options. All FLEX® options must be quoted and traded in the trading crowd of the corresponding non-FLEX® options. Quoting and trading in FLEX® currency options will be subject to Rule 1079(b), which currently governs the quoting and trading of FLEX® index and equity options.

FLEX Options offer the newest in risk management instruments, especially designed to extend investor access to customized derivative products. With FLEX Options, clients can customize equity options to fit specific investment strategies and goals.

Specify Characteristics

Allow clients to specify characteristics such as the expiration date, strike price, and exercise-style of the contract

Diversified

Offered as Equity, Index or Foreign Currency Options

Mitigate Risk

Provide customers with contract guarantee and virtual elimination of trading counterparty risk

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