Try our free 5 day trial today https://turbooptiontrading.com/2024/01/05/free-5-day-trial/
1.
o SPY Options: These are American-style options, meaning they can be exercised at any time before expiration1.
o SPX Options: These are European-style options, meaning they can only be exercised at expiration1.
2. Underlying Asset:
o SPY Options: Based on the SPDR S&P 500 ETF Trust (SPY), which is an exchange-traded fund (ETF) that holds the actual stocks in the S&P 5002.
o SPX Options: Based on the S&P 500 index itself, which is a theoretical index and not an actual fund2.
3. Settlement:
o SPY Options: Settled in shares of the ETF3.
o SPX Options: Cash-settled, meaning the difference between the strike price and the index value is paid in cash3.
4. Dividends:
o SPY Options: Pay dividends because they are based on an ETF that holds the underlying stocks4.
o SPX Options: Do not pay dividends as they are based on the index4.
5. Tax Treatment:
o SPY Options: Taxed as regular income5.
o SPX Options: Benefit from 60/40 tax treatment, where 60% of gains are taxed at long-term capital gains rates and 40% at short-term rates5.
These differences can influence your trading strategy depending on your goals and preferences. Do you have any specific questions about trading strategies for either of these options?
This is the TurboOptionTrading Youtube channel. We bring 35 years of market experience to our Youtube subscribers to show how to make money with daytrading. Join us as we do technical analysis, go over options strategies, examine market trends, identify setups and more.
Want to join the Turbo Option community and get even more hot stock picks? Visit turbooptiontrading.com. Turbo Option Trading is for traders of all experience levels from beginners to advanced market participants. We offer educational videos, one-on-one mentorship, a live trading room and even trading capital funded accounts for qualified users.
