What are Indices?

Index options are financial derivatives based on stock indices such as the S&P 500 or the Dow Jones Industrial Average.

Index options give the investor the right to buy or sell the underlying stock index for a defined time period.

An index measures the price performance of a basket of securities using a standardized metric and methodology.

Indexes in financial markets are often used as benchmarks to evaluate an investment's performance against.

Passive index investing has become a popular low-cost way to replicate the returns of popular indices such as the S&P 500 Index or Dow Jones Industrial Average.