Options on interest rates were introduced in June 1989: options based on the 13-week U.S. Treasury bill yield and options on the 5-year, 10-year, and 30-year yields to maturity of U.S. Treasury notes and bonds. The underlying value of these options moves up or down as a result of shifts in the U.S. Treasury yield curve.
In 1993, the CBOE created FLEX (flexible exchange) options on the S&P 100, S&P 500, and Russell 2000 indices. FLEX options allow institutional investors to customize the terms of an option contract, the expiration date (up to 5 years), the strike price, and the exercise style and settlement basis, with a minimum opening underlying contract value of $10 million. In 1997, options on the Dow became eligible for FLEX trading.
Trading on sector indices began on the CBOE in October 1992. Options on sector indices in the automotive (AUX), banking (BIX), chemical (CEX), software (CWX), environmental (EVX), gaming (GAX), gold (GOX), healthcare (HCX), internet (INX), insurance (IUX), oil (OIX), retail (RLX), and transportation (TRX) industries are now listed. In 1994, the CBOE Mexico Index (MEX), the Nikkei 300 Stock Index (NIK), and the CBOE Israel Index (ISX) were launched to give U.S. investors the ability to hedge the risks associated with holding stocks in foreign markets. In 1995, new CBOE sector indices in REITs (RIX) and technology (TXX) were added.