Alpaca has activated live trading access for index options through its Trading API and dashboard, moving beyond paper trading to support Cboe-listed contracts including SPX, SPXW, VIX, VIXW, DJX and XSP. The expansion targets fintech startups, broker-dealers, hedge funds, prop firms and algorithmic traders building automated options strategies.
Six index options are now available for live execution. Unlike equity options, these contracts are cash-settled and European-style, meaning no early exercise or assignment before expiration. This requires different expiry handling logic for API integrations. AM-settled contracts introduce additional complexity, with final settlement values published after market open rather than at the prior session’s close.
Traders face a $0.50 per contract fee plus regulatory and exchange charges. Alpaca currently does not provide index market data through its Market Data offering, though support is planned. The platform cautioned that paper trading results may diverge from live performance.
FXnCO Insight
Developers integrating index options should immediately adjust order logic for European-style settlement constraints and budget for higher per-contract fees versus standard equity options.
Source: Finance Magnates