Index Options

Index options are trading vehicles that are highly liquid. Thus, they are a great way to trade. These options allow an investor to place trades on the basis of the movement of a basket of stocks. This is more advantageous than choosing and trading various individual stocks.

The NASDAQ-100 Index (NDX) is one popular index comprising the largest non-financial companies listed on the NASDAQ stock market. It is an option that allows an investor to speculate on its future direction. This is done by trading an option on the underlying basket of stocks represented in the NASDAQ-100 index.

The S&P 100 (OEX) option is another index with high liquidity, also allowing an investor to speculate on the movement of the S&P 100 Index. The OEX is composed of 100 blue-chip stocks from diverse industry groups, providing a good measure of the overall performance of the market.

The Dow Jones Industrial Average Index Options (DJX) enables an investor to speculate on the future direction of the Dow. DJX Index options have increasingly become one of the well-known index options since their introduction in 1997, also serving as a highly liquid trading vehicle.

In recent years, the QQQQ options have gained popularity as an option on the NASDAQ-100 Index Tracking Stock. QQQQ options are currently traded in the market that has become the most liquid option. Also known as the "cubes" or “qubes,” the QQQQ displays an example of an exchange-traded fund (ETF). The ETFs can be traded just like a regular stock.