How to Journal Index Options: Recording Cash Settlement Cleanly
Reviewed by Leon Moyer - Published October 9, 2026 - Last reviewed October 9, 2026
In this lesson
Record an index option trade from entry to cash settlement with the right root, multiplier and settlement value, and avoid the record-keeping mistakes that distort index option results.
To journal an index option cleanly, record the exact root you traded, use the $100 multiplier, and close any position you hold to expiration at its cash settlement value: an in-the-money index option ends in a cash debit or credit equal to its intrinsic value times $100, never in shares and never as "expired worthless".
Most journal habits carry over; the last line of the record changes. Cash-Settled Options and SPX vs SPXW Options explain the mechanics; this lesson is about recording them correctly.
What makes index options different to record?
Four details matter more here.
The root. One index can trade under several option roots. Cboe's SPX specifications list the symbol as "SPX/SPXW". As SPX vs SPXW Options explains, standard monthly SPX options are AM-settled and SPXW options settle on the close. XSP, the Mini-SPX, is a separate product covered in SPX vs SPY Options. Other index options, such as NDX and RUT, can also trade under more than one root. Record the root exactly as your broker shows it, because it tells you which settlement value applies.
The multiplier. SPX, SPXW and XSP options all have a multiplier of 100, so a premium of 8.00 is $800 per contract.
No share delivery. SPX, SPXW and XSP options are European-style and cash-settled. If a position finishes in the money, the holder receives intrinsic value x $100 in cash and the assigned seller pays it. No stock position follows.
The settlement value. For a PM-settled contract such as SPXW, the settlement value is the index's official closing value on expiration day. For an AM-settled contract such as standard SPX, it comes from the opening prices on expiration morning, after trading in the option has stopped. SPX vs SPXW Options covers the timing, and The Special Opening Quotation explains how that AM value is set.
SPXW 6,050/6,075 call credit spread, cash-settled at expiration
Hover or tap the chart, or focus it and use the arrow keys, to read any price.
Open this trade in the free calculatorShow as table
How do you record a cash-settled expiration?
Treat the settlement as the exit. For each leg still open at expiration:
- Find the settlement value for that root and expiration. Use the PM value for SPXW and the AM value for standard SPX.
- Compute intrinsic value in points: settlement value minus strike for a call, strike minus settlement value for a put, and zero if it finished out of the money.
- Close the leg at that price, dated on the expiration date. If it finished in the money, a short leg closes with a cash debit and a long leg with a cash credit.
- Check the cash. The cash your broker posts, usually the next business day, should match intrinsic value x $100 x contracts.
Worked example
Example: an SPXW call credit spread held to cash settlement
The numbers are hypothetical. With the S&P 500 at 6,000 and 7 days to expiration, you sell one SPXW 6,050 call for 30.70 and buy one SPXW 6,075 call for 22.70. Those are the free profit calculator's model values at 15% implied volatility, rounded to the 0.10 tick that applies at these prices. Fees are left out.
The record shows a $200 loss, matching the cash that moved: $800 in at entry, $1,000 out at settlement.
Illustrative and hypothetical. The ticker and prices are invented for teaching, and the figures exclude commissions, fees, margin interest and taxes, which reduce real results. Past or hypothetical outcomes do not indicate future results.
A credit spread is defined risk, not small risk. This spread collects $800 and can lose $1,700, more than twice the credit, if the index settles at or above 6,075. Size it by the maximum loss, not by the credit.
The settlement, recorded as a closing entry
ONE CONTRACT
SPXW 6,050/6,075 call spread at expiration
Opened for
8.00 credit ($800)
Settlement value
6,060
Short 6,050 call
Closed at 10.00 (-$1,000)
Long 6,075 call
Closed at 0.00 ($0)
$800 credit - $1,000 settlement = -$200 realized, before fees
What record-keeping mistakes are common with index options?
Logging an in-the-money expiration as "expired worthless". This records the full credit as profit. In the example it would show +$800 instead of -$200, overstating the result by $1,000.
One trade, two records
Realized result in the journal
Using the last trade instead of the settlement value for AM-settled SPX. Standard SPX options ordinarily stop trading the business day before expiration, but they settle on expiration morning's value. Recording the prior day's last price as your exit logs a trade that never happened.
Mixing SPX and SPXW. On a third Friday, an AM-settled SPX series and a PM-settled SPXW series can expire on the same day at the same strikes, with different settlement values. If your records drop the root, you may close a position at the wrong value.
Missing the multiplier on mini-index options. XSP is one tenth the size of SPX because its index is one tenth of the S&P 500, not because its multiplier is smaller. An XSP premium of 1.60 is $160 per contract. Dividing again by 10 puts the record off by a factor of ten, and logging XSP strikes under SPX points the record at the wrong settlement value.
How do index options show up at tax time?
Cboe's index options tax page says SPX options are section 1256 contracts eligible for 60/40 treatment, subject to the criteria of the tax code. The IRS uses Form 6781 to report "any gain or loss on section 1256 contracts under the mark-to-market rules", and the form's instructions treat those gains and losses as 60% long term and 40% short term, however long the contracts were held. The Tax Treatment of Options module (Module 4F) covers it, and a tax professional can confirm how it applies to you.
Check your understanding
You sold an AM-settled SPX 5,900 put for 12.00. It last traded at 15.00 on Thursday, and the settlement value on Friday morning is 5,870. What is the realized result?
Show answer
-$1,800. The put settles at 5,900 - 5,870 = 30 points, a $3,000 cash debit, against the $1,200 credit. Recording Thursday's 15.00 last trade would show -$300, which is not what settled.
An XSP 605/610 call credit spread collected 1.60. XSP settles at 607. What cash debit should the journal show, and what is the result?
Show answer
A $200 debit: (607 - 605) x $100 on the short call, with the long 610 call worthless. The result is $160 - $200 = -$40 before fees.
Your short SPXW call finished 10 points in the money. Should the journal show shares?
Show answer
No. SPXW options are cash-settled. Close it at 10.00 on the expiration date, a $1,000 cash debit per contract.
Key takeaways
- Record the exact root (SPX, SPXW, XSP), because the root tells you which settlement value applies.
- SPX, SPXW and XSP options all use a multiplier of 100; XSP is smaller because its index is one tenth of the S&P 500.
- Close an in-the-money index option on the expiration date at intrinsic value from the settlement value: a cash debit or credit, never shares.
- For AM-settled SPX, use the settlement value from expiration morning, not the last trade before trading stopped.
Common questions
How do I record an SPX option that expired in the money?
Close it on the expiration date at its intrinsic value, (settlement value - strike) x $100 for a call or (strike - settlement value) x $100 for a put. That cash debit or credit is the exit. Do not record it as expired worthless or as an assignment into shares.
Should I journal SPX and SPXW as the same symbol?
Record the root your broker shows. SPX and SPXW track the same index but settle differently, AM versus PM, so keeping the root lets you look up the right settlement value and review the two separately.
What price do I use to close an AM-settled SPX option in my journal?
The exercise settlement value calculated from the opening prices on expiration morning, not the last trade before trading stopped. You usually learn it on expiration morning, after the options have stopped trading.
Is the XSP multiplier 10 or 100?
100. Cboe's XSP specifications list a multiplier of 100. The mini part is the index itself, which is one tenth of the S&P 500, not the multiplier, so one point of an XSP option is still $100 per contract.