The Chicago Board Options Exchange pioneered index option trading when it launched options on the S&P 100 Index, or OEX. The S&P 100 includes 100 of the largest companies with shares listed on the U.S. stock exchanges. Standard & Poor's decides which stocks will be added or removed from the OEX. To be included, a stock must be among the more actively traded and have listed options. When options began trading on the index itself in the early 1980s, they quickly became popular among traders. Since then, however, a number of competing indexes have emerged that also allow option strategists to trade the market. The S&P 100 European-Style Index, or XEO, began trading in July 2001. Both are cash-based indexes. Therefore, the options settle for cash (not shares, as with stock options). However, the way the OEX and the XEO settle is different. Prior to 1983, when the CBOE launched OEX options trading, strategists were limited to trading stock options. Just like today, all stock options settled American-style, which means that exercise can take place any time prior to expiration. Naturally, then, when OEX options began trading, they also settled American-style. However, since then, many index options used the European-style settlement feature, which removes the risk of early assignment associated with strategies like credit and calendar spreads. The XEO was the CBOE's response to the growing popularity of European-style options. It offered traders a way to play the S&P 100, but with European rather than American-style options. The iShares S&P 100 (OEF) has become a viable tool for strategists seeking to play not just one or two stocks, but the market as a whole. Options on this investment vehicle were launched in February 2001. The OEF isn't an index, but an exchange-traded fund. Like other ETFs, iShares can be bought and sold like a stock, which isn't possible with the cash-based XEO and OEX. Consequently, settlement of OEF options also takes place like stock options. That is, the options settle for shares, not cash. In addition, like other stock options, the OEF exercises American-style.