Products

 

DOOMSM Put Options

  • Deep Out-Of-The-Money Put OptionsSM

A credit derivative market alternative



DOOM and CEBO

For years, sophisticated investors have used listed options as alternatives to OTC-traded credit derivatives such as credit default swaps (CDS). CBOE is now highlighting "DOOMSM"or "Deep Out-Of-the Money" put options because investors are demanding listed alternatives now more than ever before. The following link DOOM Quick Reference Guide explains how DOOM Put Options and CDS are functionally similar, and provides several specific examples that compare the viability of DOOM Put Options to CDS. It also provides a list of potential names where investors may currently use DOOM Put Options and Credit Event Binary Options (CEBOs) in place of CDS. Below is a list of single-name entities that have equity DOOM puts and CEBOs listed on them. For additional information regarding CEBOs please refer to www.cboe.com/credit.


CDS Alternatives

Deep-Out-Of-Money Puts and Credit Event Binary Options (CEBOs)

January 2012 Equity Puts



Reference Name Ticker Stock Price @ Put Strikes CDS Spreads @
Equity CEBO 2/11/2011 Low %ATM 2/11/2011
AK STEEL CORPORATION AKS AKSC 16.34 2.5 15% 472.01
AMERICAN AXLE & MANUFACTURING, INC. AXL AXLC 14.32 2.5 17% 398.42
K. HOVNANIAN ENTERPRISES, INC HOV HOVC 4.49 2.5 56% 951.71
MBIA INC. MBI MBID 10.76 2.5 23% 789.18
SMITHFIELD FOODS, INC., SFD SFDC 21.83 2.5 11% 344.57



Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (ODD). Copies of the ODD are available from your broker, by calling 1-888-OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, Illinois 60606. The information on this website is provided solely for general education and information purposes and therefore should not be considered complete, precise, or current. Many of the matters discussed are subject to detailed rules, regulations, and statutory provisions which should be referred to for additional detail and are subject to changes that may not be reflected in the website information. No statement within the website should be construed as a recommendation to buy or sell a security or to provide investment advice. The inclusion of non-CBOE advertisements on the website should not be construed as an endorsement or an indication of the value of any product, service, or website. The Terms and Conditions govern use of this website and use of this website will be deemed acceptance of those Terms and Conditions.