OPTIONS

Tuesday, April 10, 2007

What is Option Trading?

Option Trading is buying or selling option contracts in an exchange.
In the US, there are 6 exchanges that are trading listed/standardized stock options:

1. Chicago Board Options Exchange (CBOE)
2. The Philadelphia Stock Exchange (PHLX)
3. American Stock Exchange (AMEX)
4. Boston Options Exchange (BOX)
5. International Securities Exchange (ISE)
6. NYSE Arca in New York City

An option trader can trade (buy / sell) options via brokers with option trading services. The broker will buy and sell options in any of the above exchanges on behalf of the trader and will charge the trader a fee or commission for that service. Options trading is generally conducted through online option trading brokers, which offer lower commission charges and relatively faster transaction execution speed.

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