Exchange-Traded Option

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Exchange-Traded Option

An option contract that is traded on an exchange. An exchange-traded option is subject to all of the exchange's applicable regulations; this reduces uncertainly for the investor because exchange-traded options are standardized contracts. They contrast with over-the-counter options, the provisions of which may be customized.

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There are both over the counter (OTCs) and exchange traded options (ETOs).

Foreign exchange management: a key concern as turbulence hits European currency markets

Hence, the credit risk of exchange traded options is also low.

The Insurance Link to Securities

Over the counter options can be tailored to the individual needs of the corporate clien;or example, as discussed above, exchange traded options on the Philadelphia Stock Exchange are for a specific amount, specific maturity and specific strike price interval.

Currency options: from inception to present

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