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Unformatted text preview: irements on Registered Exchanges
1. Actively traded float
2. Generally good 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
2. Expiration Dates: current month, next month , next two
months in the cycle.
c. As the current cycle month expires, the next cycle month is
Index options typically have the current and next two months
LEAPS may go up to three years before expiration.
LEAPS 3. Position Limits: max # of options held by one player on
4. Exercise Limits: max # of options exercised in a 5-day
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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- Fall '09