Alpaca has moved index options from paper trading into live trading, giving users access to Cboe-listed contracts including SPX, SPXW, VIX, VIXW, DJX and XSP through its Trading API and dashboard.
The launch extends Alpaca’s API-first infrastructure into a product set used by fintech startups, broker-dealers, hedge funds, prop firms and algorithmic traders to build and automate options strategies.
The company had introduced index options in paper trading a few weeks earlier, allowing users to test workflows before committing live capital.
“We’ve long focused on API-first infrastructure for builders. We’ve extended that coverage to index options, so you can test strategies, confirm order handling, and validate expiration logic in paper before trading live,” Alpaca said in the announcement.
Cash-Settled Index Options Go Live
At launch, six index options are available for live trading. They include XSP, the mini version of the S&P 500 index option, alongside contracts linked to the S&P 500, the VIX volatility index and the Dow Jones Industrial Average.
These products differ from standard equity options in several operational ways. Alpaca said index options are cash-settled, meaning traders do not take delivery of shares or hold an underlying position after expiry. Profit or loss is settled in cash.
The contracts are also European-style options. That means traders cannot exercise long positions early, and positions cannot be assigned before expiration.
For API users, this changes the logic around expiry handling compared with American-style equity options. Alpaca also highlighted settlement and order-handling considerations.
AM-settled contracts use a final settlement value published after the market open, so the final value is not known at the close of the previous session. Some AM-settled contracts may also have a morning cut-off for new orders on expiration day.
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Fees and Data Limitations
The launch gives developers live access to index options, but Alpaca pointed to several product-specific limitations and costs. Index options carry exchange fees that can differ from standard equity options.
Alpaca said US-listed index options trades are subject to a $0.50 per contract fee, in addition to pass-through regulatory and exchange fees.
The company also said it does not currently provide index data through its Market Data offering. Support for index market data is planned for a future release.
Alpaca warned that paper trading results may differ from live trading because simulated fills, liquidity, latency and order handling can vary from market execution. Options trading is not suitable for all investors and can result in significant losses, the company added.
The move gives Alpaca users a path from simulated index options workflows into live trading on the same API infrastructure, while keeping the product tied to additional fee, data and settlement considerations.
