CBOE S&P 500 BuyWrite Index (BXM) Explained

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect Choice For Beginners and Middle-Level Traders!
    Free Demo Account! Free Education!

  • Binomo
    Binomo

    Honest broker!

Contents

CBOE S&P 500 BuyWrite Index (BXM)

The CBOE S&P 500 BuyWrite Index (BXM) is a benchmark index published in Apr 2002 and jointly developed by the CBOE and Standard & Poor’s that tracks the performance of a hypothetical covered call strategy on the S&P 500 Index.

The S&P 500 Buy-Write strategy involves buying the entire stock portfolio covered by the S&P 500 Index and selling equivalent number of near-term slightly out-of-the-money S&P 500 index call options on a monthly basis.

A study by Callan Associates, an investment services consulting firm, analysing the performance of the BXM from June 1988 to August 2006 revealed that the BXM generated returns that are comparable to the S&P 500 but at about two-thirds of the risk. Note that transaction costs not taken into account when computing the returns.

The BXM underperformed the S&P 500 during rising equity markets and outperformed the S&P 500 when markets were flat or declining due to the cushion provided by income generated from selling the calls. A relatively attractive feature of the BXM is the steadiness and low volatility of BXM returns. From June 1988 through December 2006, the annualized standard deviation was 9.2% for BXM compared to 13.8% for the S&P 500.

You May Also Like

Continue Reading.

Buying Straddles into Earnings

Buying straddles is a great way to play earnings. Many a times, stock price gap up or down following the quarterly earnings report but often, the direction of the movement can be unpredictable. For instance, a sell off can occur even though the earnings report is good if investors had expected great results. [Read on. ]

Writing Puts to Purchase Stocks

If you are very bullish on a particular stock for the long term and is looking to purchase the stock but feels that it is slightly overvalued at the moment, then you may want to consider writing put options on the stock as a means to acquire it at a discount. [Read on. ]

What are Binary Options and How to Trade Them?

Also known as digital options, binary options belong to a special class of exotic options in which the option trader speculate purely on the direction of the underlying within a relatively short period of time. [Read on. ]

Investing in Growth Stocks using LEAPS® options

If you are investing the Peter Lynch style, trying to predict the next multi-bagger, then you would want to find out more about LEAPS® and why I consider them to be a great option for investing in the next Microsoft®. [Read on. ]

Effect of Dividends on Option Pricing

Cash dividends issued by stocks have big impact on their option prices. This is because the underlying stock price is expected to drop by the dividend amount on the ex-dividend date. [Read on. ]

Bull Call Spread: An Alternative to the Covered Call

As an alternative to writing covered calls, one can enter a bull call spread for a similar profit potential but with significantly less capital requirement. In place of holding the underlying stock in the covered call strategy, the alternative. [Read on. ]

Dividend Capture using Covered Calls

Some stocks pay generous dividends every quarter. You qualify for the dividend if you are holding on the shares before the ex-dividend date. [Read on. ]

Leverage using Calls, Not Margin Calls

To achieve higher returns in the stock market, besides doing more homework on the companies you wish to buy, it is often necessary to take on higher risk. A most common way to do that is to buy stocks on margin. [Read on. ]

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect Choice For Beginners and Middle-Level Traders!
    Free Demo Account! Free Education!

  • Binomo
    Binomo

    Honest broker!

Day Trading using Options

Day trading options can be a successful, profitable strategy but there are a couple of things you need to know before you use start using options for day trading. [Read on. ]

What is the Put Call Ratio and How to Use It

Learn about the put call ratio, the way it is derived and how it can be used as a contrarian indicator. [Read on. ]

Understanding Put-Call Parity

Put-call parity is an important principle in options pricing first identified by Hans Stoll in his paper, The Relation Between Put and Call Prices, in 1969. It states that the premium of a call option implies a certain fair price for the corresponding put option having the same strike price and expiration date, and vice versa. [Read on. ]

Understanding the Greeks

In options trading, you may notice the use of certain greek alphabets like delta or gamma when describing risks associated with various positions. They are known as “the greeks”. [Read on. ]

Valuing Common Stock using Discounted Cash Flow Analysis

Since the value of stock options depends on the price of the underlying stock, it is useful to calculate the fair value of the stock by using a technique known as discounted cash flow. [Read on. ]

CBOE S&P 500 BuyWrite Index (BXM)

What is the CBOE S&P 500 BuyWrite Index (BXM)?

The CBOE S&P 500 BuyWrite Index is a benchmark index that shows the performance of a portfolio using a buy-write strategy, in effect a form of hedging.

Where have you heard about the CBOE S&P 500 BuyWrite Index (BXM)?

As an investor, you may have come across the index in financial media or in guides to investment. Your financial adviser may have mentioned it, as may fellow investors. It does, however, relate to a sophisticated trading strategy, thus investors are likely to become aware of it only when they have gained experience.

What you need to know about the CBOE S&P 500 BuyWrite Index.

The CBOE S&P 500 BuyWrite Index is a benchmark index that displays how a portfolio would perform had it been using a buy-write strategy based on the S&P 500. A buy-write strategy involves buying a quantity of a particular security or securities, such as the shares listed in the S&P 500 Index, and then writing and selling a call option, giving the buyer the right but not the obligation to buy that package of securities at a higher price.

The seller immediately earns the option premium (the fee charged for the option). If the portfolio does not reach that higher price, the buyer will not exercise the option and the seller keeps the premium and the securities. If it goes above that price, the seller transfers the securities to the buyer at the agreed price and foregoes only the difference between the option price and the market price. Buy-write strategies thus provide protection on the downside and the option-premium income in return for limiting the potential upside.

CBOE S&P 500 BuyWrite Index – ETF Tracker

The index is designed to measure the total rate of return of a hypothetical “buy-write”, or “covered call”, strategy on the S&P 500 Index. This strategy consists of a hypothetical portfolio consisting of a “long” position indexed to the S&P 500 Index (i.e. purchasing the common stocks included in the S&P 500 Index) and the sale of a succession of one-month, at- or slightly out-of-the-money S&P 500 Index call options that are listed on the Chicago Board Options Exchange.

ETFs Tracking Other Mutual Funds

ETFs Tracking The CBOE S&P 500 BuyWrite Index – ETF List

ETFs tracking the CBOE S&P 500 BuyWrite Index are presented in the following table.

ETFs Tracking The CBOE S&P 500 BuyWrite Index – ETF Returns

The following table presents historical return data for ETFs tracking the CBOE S&P 500 BuyWrite Index.

ETFs Tracking The CBOE S&P 500 BuyWrite Index – ETF Fund Flow

The table below includes fund flow data for all U.S. listed Highland Capital Management ETFs. Total fund flow is the capital inflow into an ETF minus the capital outflow from the ETF for a particular time period.

Fund Flows in millions of U.S. Dollars.

ETFs Tracking The CBOE S&P 500 BuyWrite Index – ETF Expenses

The following table presents expense information for ETFs tracking the CBOE S&P 500 BuyWrite Index.

ETFs Tracking The CBOE S&P 500 BuyWrite Index – ETF Dividends

The following table presents dividend information for ETFs tracking the CBOE S&P 500 BuyWrite Index, including yield and dividend date.

ETFs Tracking The CBOE S&P 500 BuyWrite Index – ETF Holdings

The following table presents holdings data for all ETFs tracking the CBOE S&P 500 BuyWrite Index. For more detailed holdings data for an ETF click the ‘View’ link in the right column.

ETFs Tracking The CBOE S&P 500 BuyWrite Index – ETF Tax Rates

The following table presents sortable tax data for ETFs currently tracking the CBOE S&P 500 BuyWrite Index.

ETFs Tracking The CBOE S&P 500 BuyWrite Index – ETF Technicals

The following table presents certain technical indicators for ETFs tracking the CBOE S&P 500 BuyWrite Index. To see complete technical metrics click the ‘View’ link in the right column.

ETFs Tracking The CBOE S&P 500 BuyWrite Index – ETF Analysis

The following table presents links to in-depth analysis for ETFs tracking the CBOE S&P 500 BuyWrite Index.

ETFs Tracking The CBOE S&P 500 BuyWrite Index – ETF Realtime Ratings

The following table presents a proprietary ETFdb rating for ETFs tracking the CBOE S&P 500 BuyWrite Index.

CBOE S&P 500 BuyWrite Index – ETF Tracker

” data-striped=”true” data-toggle=”table”>
Symbol ETF Name Asset Class Total Assets* YTD Avg Volume Previous Closing Price 1-Day Change Overall Rating 1 Week 4 Week 1 Year 3 Year 5 Year YTD FF 1 Week FF 4 Week FF 1 Year FF 3 Year FF 5 Year FF ETFdb.com Category Inception ER Commission Free Annual Dividend Rate Dividend Date Dividend Annual Dividend Yield % P/E Ratio Beta # of Holdings % In Top 10 Complete ST Cap Gain Rate LT Cap Gain Rate Tax Form Lower Bollinger Upper Bollinger Support 1 Resistance 1 RSI Advanced Fact Sheet ETF Holdings Chart ETF Home Page Head-To-Head Liquidity Rating Expenses Rating Returns Rating Volatility Rating Dividend Rating Concentration Rating
PBP Invesco S&P 500 BuyWrite ETF Multi-Asset $185,431 -22.2% 133,239.0 $16.68 0.18% 1.3% -15.4% -16.6% -9.0% 3.4% Large Cap Blend Equities 2007-12-20 0.49% N/A $1.22 2020-03-23 $0.08 7.33% 21.9 0.56 505 26.5% View 35% 15% 1099 $14.74 $18.36 $16.55 $16.76 41.83 View View View View View View A- C

Sort By: Largest in Assets Highest YTD Returns Lowest Expense Ratio

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect Choice For Beginners and Middle-Level Traders!
    Free Demo Account! Free Education!

  • Binomo
    Binomo

    Honest broker!

Like this post? Please share to your friends:
Binary Options Trading Step By Step
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: