CBOE. Products and Option Trading. Amit Agarwal Lu Fang Wenbo Hu. Contents. Introduction to CBOE People involved Types of orders Trading system/ process Technology Products. Introduction. The world's largest options marketplace.
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Products and Option Trading
5 types of person involved
The DPM (Designated Primary Market Maker) is an exchange appointed organization, who acts a specialist for an option.
This combines the strengths of the market-maker with those of the specialist in one entity.
Brokerage sends the order to Order Routing System (ORS)
Sent to floor broker
(Depending on the price and volume parameters set by the brokerage and CBOE)
Order meets volume & price criterion
Gets printed at the firm’s booth
Sent to Electronic Book (EBOOK)
Executed thru Retail Automatic Execution System (RAES)
You can download it from http://www.cboe.com/LearnCenter/RCMain.asp
ETF: baskets of securities that are traded, like individual stocks, on an exchange
There are a number of different ETFs on the market currently, including Qubes, SPDRs, sector SPDRs, MidCap SPDRs, HOLDRs, iShares, and Diamonds. All of them are passively managed, tracking a wide variety of sector-specific, country-specific, and broad-market indexes.
Minimum Size: 250 contracts new FLEX
Expiration Date: Any business day up to 3 years from trade date excluding 5 business days centered on the 3rd Friday.
Exercise Style: American or European.