Dow Jones Options Now Settle in the Afternoon, Traders Rejoice
Published Date: 1/26/2026
Notice
Summary
Cboe Exchange wants to let traders buy and sell Dow Jones options that settle in the afternoon instead of the morning. This change affects anyone trading these options and could make trading more flexible and aligned with market closes. The new rules could roll out soon, giving investors fresh ways to manage their money.
Analyzed Economic Effects
6 provisions identified: 4 benefits, 1 costs, 1 mixed.
Weekly and EOM P.M.-Settled DJX Options
The Exchange proposes to allow P.M.-settled Dow Jones (DJX) options with Nonstandard Expirations, including Weekly expirations (any Monday–Friday except third Fridays or EOM days) and end-of-month (EOM) expirations. The maximum number of expirations per Weekly or EOM expiration in a class would match the standard maximum (currently six for DJX), new Weekly/EOM series may be added up to and including the expiration date, and Weekly/EOM series first listed may expire up to four weeks from the listing date. On their last trading day, transactions in expiring Weekly and EOM index options may be effected between 9:30 a.m. and 4:00 p.m. Eastern Time.
More Hedging Flexibility and Timing Options
The Exchange states that adding Weekly, EOM, QIX, and Expiration Friday P.M.-settled DJX options will let market participants roll positions on more trading days, spread risk across more days, and better tailor hedges to specific timing needs (including special events), which may reduce the premium cost of hedging. The proposal also notes P.M.-settlement permits trading throughout the day on the expiration date so traders can trade out of positions up until settlement.
Quarterly (QIX) P.M.-Settled DJX Options
The Exchange proposes to permit P.M.-settled Quarterly Index Expirations (QIXs) for DJX options. Under Rule 4.13(c), up to eight near-term quarterly expirations may be open for trading in a class, and these QIXs will be P.M.-settled and treated like third-Friday expirations except for settlement timing.
Expiration-Friday P.M.-Settled DJX Options
The Exchange proposes to amend rules to permit P.M.-settled DJX options that expire on the standard third Friday-of-the-month (Expiration Friday). These Expiration-Friday P.M.-settled DJX options would be treated the same as A.M.-settled DJX options except that they use a P.M. exercise settlement value.
Last Trading Day Cutoff at 4:00 PM
The proposed rule amends trading hours so that on their last trading day, expiring P.M.-settled DJX options may be traded on the Exchange between 9:30 a.m. and 4:00 p.m. Eastern Time (rather than 9:30 a.m. to 4:15 p.m. for non-expiring series). The Exchange states this is to avoid trading after the exercise settlement value is calculated at the close.
Aggregation and Reporting for Position Limits
P.M.-settled DJX options will be aggregated with other option contracts for purposes of determining compliance with applicable position and exercise limits and for position reporting requirements. The filing notes there are no position and exercise limits for DJX options, but FLEX positions in index options subject to no position limits must be reported if a Trading Permit Holder maintains in excess of 100,000 contracts.
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