Is there an Index of the stock market that you can buy/sell options for?

Question

If the stock market is going up and I wanted to use options for the broad market, is there and index or fund that I could do that with?

Answer 1

You can get a list of all the index options, including more than 25 considered broad market, traded on the CBOE at

http://www.cboe.com/Products/Cash-SettledIndexOptions.aspx#broadbased

If you are interested in ETFs as well, you can find them at

http://www.cboe.com/Products/OptionsOnETFs.aspx#etfquote

Answer 2

SPX is a pretty good option to learn to trade. SPX represents the Standard & Poors 500 Stock Index. The S&P 500 is a reasonable proxy for the entire U.S. stock market. It's performance is closely correlated to the Dow Jones Industrials.

If you are seeking a true proxy for the entire U.S. stock market, there are other options (look for the Wilshire 5000 Index as one example). However, the volume in these other options is very light compared to SPX. This means more volatility.

I would suggest learning with the SPX because the volume is huge and you are not going to get wiped out in an hour. There are specialty brokerages that only trade options. They usually offer a free program to practice your trading skills at no risk. Good luck.

Answer 3

If you look at the broad market ETFs (most major indices have an ETF that tracks it) you can normally trade options on the ETFs. Examples are SPY and DIA.
I'm assuming you know what you're doing with options.
Best of luck.

Answer 4

SPX options are traded at the CBOE. They're based on the S&P 500 Index.