The Special Opening Quotation, or SOQ, is the single value used to cash-settle certain expiring index options, and it’s calculated from the first trade of each component stock on expiration morning rather than from any live index reading. If you hold an expiring S&P 500 Index (SPX), Russell 2000 (RUT), or Nasdaq-100 (NDX) option that uses AM settlement, your profit or loss is determined by this number, not by where the index closed Thursday or where it’s trading when the bell rings Friday. Because the SOQ stitches together hundreds of separate opening prints, it can settle at a level the index itself never actually shows on the tape.
Which Index Options Settle by SOQ
The SOQ applies to AM-settled, European-style index options. European-style means no early exercise: the settlement value on expiration day is the only number that determines the payout. On their standard monthly (third Friday) expirations, this includes SPX, RUT, and NDX.1Cboe. Settlement of Standard AM-Settled S&P 500 Index Options2Cboe Global Markets. RUT/RUTW Options Product Specifications
Not every index option works this way. Weekly SPX contracts (SPXW) are PM-settled, meaning the final value is set at the close on expiration day rather than at the open.3Cboe Global Markets. S&P 500 Weeklys Options Specifications The difference has real consequences. With PM settlement you can watch prices all day and exit if you don’t like where things are going. With AM settlement the number is locked in during the opening auction before you’ve had a chance to react.
VIX options and futures also use an SOQ, but it isn’t built the same way. The VIX SOQ uses opening trade prices of a selected set of SPX options expiring 30 days later, skips the interpolation step used in the real-time VIX calculation, and includes options with zero bids that the live index excludes. Because of these differences, the settlement print can diverge noticeably from the VIX level shown on your screen.4Cboe. Cboe VIX FAQ
How the SOQ Is Calculated
The calculation takes the first trade price for every stock in the index and combines those prices using the same weighting the index applies during regular trading hours. For the SPX, that means capturing roughly 500 individual opening prints from the NYSE, Nasdaq, and Cboe, each weighted by market capitalization.5Cboe Global Indices. Cboe Indices Special Opening Quotation Methodology Apple and Microsoft move the needle far more than a small-weight name.
Those opening prices come from each exchange’s opening auction, a process built to match the maximum number of buy and sell orders at a single price and produce a clean, actionable print for each stock.1Cboe. Settlement of Standard AM-Settled S&P 500 Index Options The SOQ isn’t finalized until every component has opened. Stocks don’t all open at the same instant, so the process can take several minutes, and the final composite is a number that never existed as a single tradable index level.
Where to Find the Final Settlement Value
Once the SOQ is set, Cboe publishes it under a dedicated ticker. The S&P 500 settlement value appears under ticker SET, the Russell 2000 uses RLS, the Dow Jones uses DJS, and sector indices have their own tickers as well.6Cboe Global Markets. Index Settlement Values VIX settlement is published under VRO. Checking the actual settlement ticker rather than the live index is the only reliable way to know what your contract settled at.
When the SOQ Is Determined
Standard AM-settled index options expire on the third Friday of each month, with expiration calendars published years ahead.1Cboe. Settlement of Standard AM-Settled S&P 500 Index Options The quarterly cycles (March, June, September, and December) tend to concentrate the most volume because index futures, index options, and single-stock options can all expire together.
When a holiday falls on the third Friday, expiration processing moves to the prior business day. In 2026, the June 19 Juneteenth holiday shifts that month’s expiration to Thursday, June 18.7The Options Industry Council. 2026 Expiration Calendar For PM-settled weekly options, Friday expirations shift back to Thursday the same way, but Monday-expiring weeklies shift forward to Tuesday instead.3Cboe Global Markets. S&P 500 Weeklys Options Specifications
Why the SOQ Often Differs From the Index on Your Screen
This is what surprises people most about AM settlement. You might glance at the S&P 500 at 9:35 a.m. on expiration Friday, see it at 5,800, then find your option settled at 5,815. The reason is structural. The index level your broker displays right after the open is a blend of fresh opening prints for stocks that have already traded and stale prior-close values for stocks that haven’t. The SOQ waits for every component to open and uses only opening-auction prices, so it’s internally consistent in a way the live index at 9:30 a.m. isn’t.1Cboe. Settlement of Standard AM-Settled S&P 500 Index Options
Cboe’s own data covering March 2009 through March 2024 shows the SOQ landing outside the entire daily high-low range of the S&P 500 roughly 30% of the time on quarterly AM-settled expiration dates, most often above the daily high.1Cboe. Settlement of Standard AM-Settled S&P 500 Index Options That’s a natural consequence of how staggered openings combine into a composite. If you’re estimating your payout from where the index is trading at any point during the day, you’re working with the wrong number.
The Overnight Gap and How It Creates Risk
Historically, AM-settled index options stopped trading at the end of Thursday’s session, but the settlement value wasn’t set until Friday morning’s opening auction. That gap left traders unable to adjust or hedge expiring positions overnight, even as futures, news events, and overseas markets kept moving. An earnings surprise, a central bank decision, or a geopolitical shock between Thursday’s close and Friday’s open flowed straight into the settlement value with no chance to react.8Federal Register. Self-Regulatory Organizations – Cboe Exchange Inc – Notice of Filing of a Proposed Rule Change To Allow Certain Expiring AM-Settled Index Options To Trade During the Global Trading Hours Trading Session
In mid-2025, Cboe received accelerated approval for a rule change letting expiring non-volatility AM-settled index options trade during the Global Trading Hours (GTH) session on the morning of expiration, before the regular-hours open produces the SOQ. That opens a window to manage risk that didn’t exist before. Confirm with your broker whether your platform supports GTH-session trading of expiring contracts, because not every retail platform does.
What Happens When a Stock Doesn’t Open
Sometimes a component won’t open on time because of a trading halt, an order imbalance, or a technical issue. The methodology has a straightforward fallback: if a stock doesn’t open on a given business day, the previous business day’s closing price, adjusted for any corporate actions, is used instead.5Cboe Global Indices. Cboe Indices Special Opening Quotation Methodology For most single-stock delays, the impact on a 500-stock index is small. If a top-weight component is the one halted, the substituted price can move the final number more.
A market-wide circuit breaker is a more extreme scenario. If a Level 3 breaker shuts down all trading for the rest of the day, the settlement value for cash-settled index options is determined by an OCC panel that includes representatives from the listing exchange. For PM-settled products, that panel would typically use the SOQ from the next trading day.9Cboe Global Markets. U.S. Market Wide Circuit Breaker FAQ
How the Cash Payout Works
Index options settle in cash, not stock. Once the SOQ is set, the Options Clearing Corporation calculates the exercise settlement amount for every in-the-money contract: the difference between the strike price and the SOQ, multiplied by the contract multiplier (typically $100). The OCC nets exercise and assignment amounts across each clearing member’s accounts down to a single figure.10The Options Clearing Corporation. OCC Rules
Cash settlement happens on the business day following expiration.2Cboe Global Markets. RUT/RUTW Options Product Specifications When the money actually lands in your brokerage account depends on your broker’s internal processing, but the institutional plumbing generally completes within that same business day.
Tax Treatment Under Section 1256
Cash-settled index options on broad-based indices like the S&P 500 and Russell 2000 qualify as Section 1256 contracts. Regardless of how long you held the position, 60% of any gain or loss is treated as long-term capital gain, and 40% as short-term.11Office of the Law Revision Counsel. 26 US Code 1256 – Section 1256 Contracts Marked to Market For a top-bracket filer, the blended rate is meaningfully lower than the ordinary rate that would hit a short-term stock trade.
Section 1256 contracts also carry a mark-to-market requirement. Any open positions at year-end are treated as if you sold them at fair market value on the last business day of the year, with the resulting gain or loss counted for that tax year.11Office of the Law Revision Counsel. 26 US Code 1256 – Section 1256 Contracts Marked to Market You can’t defer a gain by carrying a position across New Year’s. If you plan to hold index option positions into December, factor that in: taxes come due on unrealized gains even though the trade is still open.