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Finance Dictionary and Glossary of Investment Terms
An option whose underlying security is an index. If exercised, settlement is made by cash payment, since physical delivery is not possible.
A call or put option on a financial index.
A call or put option based on a stock market index.
An option on a stock index, usually the Standard & Poor''s 500. Basically, these are a way to bet on the direction of the market. They can also be used to hedge against risk. Options on market-sector indexes are also available.