B b listing requirements on registered exchanges 1

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Unformatted text preview: irements on Registered Exchanges 1. Actively traded float Actively float 2. Generally good volatility Generally volatility 3. SEC prefers multiple listing for all new option classes All Rights Reserved Dr David P Echevarria 5 ORGANIZED OPTIONS TRADING C. Contract Specifics (CBOE) 1. Contract Size is for 100 shares. For indexes, a multiple of Contract the index the 2. Expiration Dates: current month, next month , next two Expiration months in the cycle. a. a. b. b. c. c. As the current cycle month expires, the next cycle month is As opened. Index options typically have the current and next two months Index opened. LEAPS may go up to three years before expiration. LEAPS 3. Position Limits: max # of options held by one player on 3. Position same side same 4. Exercise Limits: max # of options exercised in a 5-day Exercise period. All Rights Reserved Dr David P Echevarria 6 ORGANIZED OPTIONS TRADING D. Players in the Options Market 1. Market Makers a. Provide liquidity, Imposes spread as charge for liquidity services 2. Scalpers: near simultaneous buy...
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