SPX vs SPY options is one index wearing two very different contracts: SPX options are cash-settled, European-style options on the S&P 500 index itself, roughly 10 times the size of SPY options, while SPY options are American-style and settle into shares of the ETF. Taxes split them too. Cboe says SPX options may qualify for Section 1256's 60/40 treatment and lists SPY options' tax treatment as "standard." What follows is a mechanics guide, not tax advice.
Same benchmark, same direction. Everything else, from contract size to what lands in your account at expiration, is different. Here is the desk's side-by-side.
Size: one SPX contract is roughly ten SPY contracts
The S&P 500 (SPX) closed at 7,659.44 on October 16, 2026, and $SPY closed at 763.25 the same day. Divide one by the other and the ratio is 10.04. Both contracts carry a 100 multiplier: Cboe's SPX specifications list a multiplier of 100, and its ETP options specifications define the SPY-style contract as generally 100 shares of the fund.
That makes the gap in dollar exposure stark.
| Contract | Price at the October 16, 2026 close | Multiplier | Notional per contract |
|---|---|---|---|
| SPX option | 7,659.44 | 100 | $765,944 |
| SPY option | 763.25 | 100 | $76,325 |
| 10 SPY options | 763.25 | 100 x 10 | $763,250 |
| XSP (Mini-SPX) option | 765.944 (1/10 of SPX) | 100 | $76,594.40 |
Notice that ten SPY contracts land close to one SPX contract, but not exactly on it, because the ratio was 10.04, not 10.00. Any "10-for-1" swap between the two is an approximation.
The bridge between them is XSP. Cboe's Mini-SPX contract is based on one-tenth of the S&P 500 index, also with a 100 multiplier, which puts it in SPY's size range while keeping the index-option mechanics.
The contract specs, side by side
Cboe publishes its own comparison of its S&P 500 option products alongside SPY. Pulled together with the individual contract specifications, the key differences look like this:
| Feature | SPX (standard) | SPXW (Weeklys, end of month) | SPY | XSP (Mini-SPX) |
|---|---|---|---|---|
| Underlying | S&P 500 index | S&P 500 index | 100 shares of the ETF | 1/10 of the S&P 500 index |
| Exercise style | European | European | American | European |
| Settlement | Cash | Cash | Physical: ETF shares | Cash |
| AM or PM settlement | AM | PM | PM | PM |
| Expirations | Third Friday | Mon. to Fri., third Friday and last trading day of the month | Standard third-Friday series plus shorter-dated series; check Cboe's calendar | Mon. to Fri., third Friday and last business day of the month |
| Global Trading Hours | Yes | Yes | No | Yes |
| Tax treatment per Cboe | May benefit from 60/40 | May benefit from 60/40 | Standard | May benefit from 60/40 |
Source: Cboe's S&P 500 option product comparison and the SPX, XSP and ETP option specifications.
What actually happens at expiration
SPX: cash, and the AM-settlement wrinkle
Exercise of an SPX option delivers cash on the business day after expiration. Per Cboe's SPX specifications, the settlement amount equals the difference between the exercise-settlement value and the strike, multiplied by $100. A hypothetical 7,600 call that settles at 7,650 pays 50 x $100 = $5,000. No shares change hands, so there is no stock position to finance or unwind.
The standard monthly SPX carries a quirk traders need to respect. Trading ordinarily stops on the business day before the settlement value is calculated, usually a Thursday. The settlement value, called SET, is then calculated from the opening sales price of each component stock on expiration day. Anyone holding into Thursday's close is exposed to an overnight move they can no longer trade out of, and the final number isn't known until after Friday's open.
SPXW contracts sidestep that: Cboe lists them as PM-settled, with trading in the expiring series ordinarily ending at 4:00 p.m. ET on expiration day. XSP's settlement value is one-tenth of the S&P 500's official closing price on the last trading day.
SPY: shares, and assignment at any time
SPY options are physically settled. Cboe's ETP specifications say a properly tendered exercise results in delivery of ETF shares on the first business day after exercise. An in-the-money long call becomes 100 shares per contract, worth $76,325 per contract at the October 16, 2026 close. A trader who doesn't want the shares has to close or roll before expiration.
The bigger difference sits on the short side. SPY options are American-style, so the holder can exercise on any business day up to expiration. Cboe's own explainer flags the classic trap: when a call is in the money heading into SPY's quarterly ex-dividend date and the dividend exceeds the option's remaining time value, the owner has an economic incentive to exercise early. The seller then has to deliver the shares, and the dividend.
SPX and XSP are European-style. They can be exercised only at expiration, which removes early-assignment risk, and index options don't pay dividends. Cboe also notes that American-style options can be exercised out of the money after the close, a risk it says cash-settled European contracts avoid.
Taxes: Section 1256 and the 60/40 split
The IRS defines a Section 1256 contract to include a "nonequity option." IRS Publication 550 says nonequity options include broad-based stock index options and names the S&P 500 as an example of a broad-based index. An equity option, by contrast, is an option to buy or sell stock or one tied to a narrow-based index. Cboe's comparison tags SPX, SPXW and XSP with possible 60/40 treatment and SPY with "standard" treatment.
Under the Form 6781 instructions, two rules do most of the work:
- Mark to market. Each Section 1256 contract held at year end is treated as if sold at fair market value on the last business day of the tax year. So gains or losses on SPX positions still open on December 31 count as if realized.
- 60/40. Capital gains or losses on these contracts are treated as 60% long term and 40% short term, regardless of how long the contracts were held. The instructions also state that the wash sale rules don't apply.
A hypothetical shows the effect. Say a trader books a $10,000 net gain on SPX options held for a few days.
| Hypothetical $10,000 net gain | Long-term portion | Short-term portion |
|---|---|---|
| Section 1256 contract (60/40) | $6,000 | $4,000 |
| Equity option held one year or less (general rule) | $0 | $10,000 |
Pub. 550 treats gains as long term only when the property was held more than one year, which is why the short-dated equity-option row is all short term. Straddles add complexity: if SPX options offset a SPY share position, Form 6781's mixed-straddle rules can come into play. Section 1256 is a US federal rule, so it doesn't govern Canadian residents. This is not tax advice; confirm your situation with a tax professional and the IRS Form 6781 page.
Trading hours and execution details
Per Cboe's specifications, SPX trades 9:30 a.m. to 4:15 p.m. ET in regular hours, with a curb session to 5:00 p.m. and Global Trading Hours from 8:15 p.m. to 9:25 a.m. ET. Cboe lists the same overnight window for SPXW and XSP. Its comparison table shows Global Trading Hours as not available for SPY options.
That map may get busier. As covered in our look at Cboe's extended options hours, Cboe plans pre-market sessions from 7:30 to 9:25 a.m. ET and a post-close window from 4:00 to 4:15 p.m. ET for options on 24 actively traded companies and five ETFs. That report didn't name the ETFs, so don't assume SPY is on the list. We explored the overnight angle in how a longer options day could rewrite the overnight playbook.
Ticks matter too. SPX premiums trading below 3.00 tick in 0.05 ($5 per contract) and all other series in 0.10 ($10). XSP ticks in 0.01 ($1) across all series. SPY options can also carry very large single trades: recall the 100,000-lot SPY put spread that printed in early October 2026 as the S&P 500 hit a record high.
Which fits whom: the trade-offs
There is no universal winner, only trade-offs:
- Account size and granularity. One SPX contract controls $765,944 of notional at the October 16, 2026 close. SPY and XSP let a trader scale in roughly one-tenth steps. For uncovered SPX writers, Cboe's margin formula starts from 15% of the aggregate contract value, $114,891.60 at that close before premium and out-of-the-money adjustments.
- Assignment tolerance. Short premium sellers who can't absorb a surprise share delivery lean on European-style SPX or XSP. SPY writers have to watch ex-dividend dates.
- Hedging a SPY share position. SPY options match the shares exactly and can deliver or take them. SPX hedges settle in cash and can raise straddle questions.
- Tax situation. The 60/40 split and year-end mark to market can help or hurt depending on the trader's profile.
- Event timing. PM-settled SPXW and XSP expirations run Monday through Friday, so traders can size around a single session's range using the expected move formula, and see how that math shifts when VIX is above 20.
For more of this kind of plumbing, the Wall Street War Room desk tracks options flow and volatility every session.
Desk Notes
What the numbers say: At the October 16, 2026 close, one SPX contract carried $765,944 of notional against $76,325 for SPY, a 10.04 ratio. SPX is cash-settled and European, and Cboe says it may qualify for 60/40 tax treatment.
What they don't: The specs don't tell you which contract is cheaper to trade on a given day, how wide the spreads run overnight, or how the tax math nets out for your account. Those depend on the fill and the filer, not the product sheet.
FAQ
Is SPX 10 times SPY?
Approximately. The S&P 500 closed at 7,659.44 and SPY at 763.25 on October 16, 2026, a ratio of 10.04. With both contracts using a 100 multiplier, ten SPY options come close to one SPX option but don't match it exactly.
Are SPY options Section 1256 contracts?
Generally not. SPY options are options on ETF shares, and Cboe lists their tax treatment as "standard." The IRS's 60/40 rule covers nonequity options, which include broad-based index options such as those on the S&P 500. Not tax advice.
Can SPX options be exercised early?
No. SPX options are European-style and, per Cboe, generally may be exercised only on the expiration date, so a short SPX position can't be assigned early.
What is XSP?
XSP is Cboe's Mini-SPX option, based on one-tenth of the S&P 500 index with a 100 multiplier. It is European-style and cash-settled off the index's official close. Cboe says it may benefit from 60/40 treatment, at a size close to SPY's.