Are you a fan of trading options on the SPX, VIX, and many other popular CBOE products? If so, these are proprietary products, meaning that they only trade on one exchange–the CBOE, and are subject to an additional fee when opening and closing a trade.
TABLE OF CONTENTS
- Why is there an additional fee to trade CBOE products?
- What products are subject to the fee?
- Option Round Trip Example of Proprietary Index Fee (SPX order)
Why is there an additional fee to trade CBOE products?
CBOE charges customers an additional fee to trade products that solely trade on their exchange. The Proprietary Index Option fee is assessed on orders on a per contract basis and is passthrough. Proprietary Index Options fees are in addition to clearing and regulatory fees that apply to all opening and closing orders.
What products are subject to the fee?
| $0.65 fee per contract | |
| SPX | S&P 500 Index |
| VIX | CBOE Market Volatility Index |
| $0.40 fee per contract | |
| OEX | S&P 100 Index (American-style exercise) |
| XEO | S&P 100 Index (European-style exercise) |
$0.25 fee per contract | |
| MXEA | MSCI EAFE Index |
| MXEF | MSCI Emerging Markets Index |
| SIXB | Materials Select Sector Index Options |
| SIXC | Communication Services Select Sector Index Options |
| SIXE | Energy Select Sector Index Options |
| SIXI | Industrials Select Sector Index Options |
| SIXM | Financial Select Sector Index Options |
| SIXR | Consumer Staples Select Sector Index Options |
| SIXRE | Real Estate Select Sector Index Options |
| SIXT | Technology Select Sector Index Options |
| SIXU | Utilities Select Sector Index Options |
| SIXV | Health Care Select Sector Index Options |
| SIXY | Consumer Discretionary Select Sector Index Options |
| $0.18 fee per contract | |
| DJX | Dow Jones Industrial Average Index 1/100 |
| RUT | Russell 2000 Index |
| $0.04* fee per contract | |
| XSP | Mini-SPX Index Options (1/10 SPX) |
*When trading XSP, the $0.07 proprietary index fee is not be assessed for quantities of 1-9 per leg. However, when trading quantities of 10 or greater per leg, the order will be subject to a $0.07 propriety index fee per contract.
Option Round Trip Example of Proprietary Index Fee (SPX order)
Let's use an example of a short 2-lot SPX -3000/+3020 call spread sold for a $9.00 credit. In total, there are a total of 4 contracts–2 short contracts and 2 long contracts. Since the fees assessed on options buys and options sales differ, the example below will break down the commissions and fees charged per leg. The proprietary index fee is handled in the same manner when trading other CBOE products such as RUT, VIX, etc.
To view a complete breakdown or our commissions and fees, please click here.
SPX Trade Example
- 2 short 3000-strike Call: $30.50 credits
- 2 long 3020-strike Call: $21.50 debit
Total Credit Received: $9.00 per spread
Cost to Open
Sell to open: -2 short 3000-strike calls
- Commission: $2 ($1/contract)
- Clearing: $0.20 ($0.10/contract)
- ORF Fee: $0.0385 ($0.01925/contract)
- SEC Fee: $0.1769 ($0.0000229 x 2 x 100 x $30.50)
- Proprietary Index Fee: $1.30 ($0.65/contract)
Total: $3.7154
Buy to Open: +2 long 3020-strike call
- Commission: $2
- Clearing $0.20
- ORF Fee: $0.0385
- Proprietary Index Fee: $1.30
Total: $3.5385
The total cost to OPEN the spread: $7.2539
Cost to Close
Three weeks later, the position is closed for a $3.00db, resulting in a $6.00 profit per spread.
- 2 short 3000-strike Call: $6.00 debit
- 2 long 3020-strike Call: $3.00 credit
Total Debit: $3.00 per spread ($600 total debit paid to close)
Buy to Close: -2 short 3000-strike calls
- Commission: $0
- Clearing: $0.20 ($0.10/contract)
- ORF Fee: $0.0385 ($0.01925/contract)
- Proprietary Index Fee: $1.30 ($0.65/contract)
Total: $1.5385
Sell to Close: +2 long 3020-strike call
- Commission: $0
- Clearing $0.20
- ORF Fee: $0.0385
- SEC Fee: $0.0174 ($0.0000229 x 2 x 100 x $3.00)
- Proprietary Index Fee: $1.30
Total: $1.5559
The total cost to CLOSE the spread: $3.0944 ($0 commission + $3.0944 fees)