The Chicago Board Options Exchange began trading options on the "Dow 10" on Jan. 4 under the ticker symbol MUT.
The Dow 10 is an equal-weighted index of the top 10 dividend-yielding stocks in the Dow Jones Industrial Average. The 10 component stocks are selected and rebalanced as an equal-weighted index annually. The multiplier for the index is $100.
The options are cash-settled, European-style index options, with expiration of up to three near-term months plus up to three months on the March expiration cycle. Long-term equity anticipation securities, or LEAPS, with expirations up to three years in the future, may also be listed. Strike prices for options and LEAPS are set to bracket the index level in increments of at least 1/2 point.
The expiration date is the Saturday following the third Friday of the expiration month, with the last trading day occurring two business days preceding the expiration date.
The settlement value is calculated based on the opening prices of the component securities on the business day prior to expiration. Arbitrade LLC is the designated market maker in the options.