FTSE 100 Index Index Option

Understanding Product/Contract Specifications

What is a contract?
One way in which LIFFE Options differ from traditional options is that the contract size and other related parameters are standardised and they are traded in a structured exchange. LIFFE options therefore have a standard product specification. This improves liquidity and the ease of trading between buyers and sellers.

Options contracts are standardised legally binding agreements. All index options contracts must specify the following details:

The following question and answers will help you to understand the FTSE 100 Option contract specifications:

Which contract months can I trade?

At any one time (in the European style option), the four nearest quarterly months (March, June, September and December) will be listed in addition to the nearest two serial months. At the beginning of September 2001, for example, the Sep 01, Oct 01, Nov 01, Dec 01, Mar 02 and Jun 02 expiry months would be available for trading.

When can I trade?

FTSE 100 Index Options trade on LIFFE CONNECT®, the Exchange's electronic trading platform, every business day from 8:00 to 16:30.

When do FTSE 100 Index Options expire?

FTSE 100 Index Options expire at 10:30:30 hours on the third Friday of the contract month. This day is known as 'Last Trading Day'.

How are FTSE 100 Index Options settled?

FTSE 100 Index Options are cash settled, i.e. on expiry the sum exchanged is the cash difference between the Exchange Delivery Settlement Price (EDSP) and the exercise price, multiplied by £10.

Accessing FTSE 100 Index Option prices

You can view the prices for LIFFE's range of equity products at www.liffe-data.com. Here you will see 15 minute delayed price data for LIFFE futures and options. In addition, there are free live prices available for LIFFE's Universal Stock Futures.