An options exchange is an organized securities exchange that provides a location and framework for trading standardized options contracts. In other words, these exchanges trade option contracts.
The options trading exchange may also trade other securities, such as stocks and futures. The exchange has complete control and discretion in setting all option contract specifications, such as strike price, contract size, and exercise date (expiry date). The exchange may also set rules for the maximum allowable open interest.
Specifics of the settlement process are also an important determining factor for the exchange. An example relating to this is the early exercise of an option by one option holder out of many, and the logistics of how the exchange will deliver the underlying asset.
An options trading exchange may or may not have fully electronic trading facilities available.
There are currently (as at the beginning of 2009) six exchanges in the Unites States that list standardized stock options for options trading. They are as follows:
1. American Stock Exchange (AMEX)
2. Boston Options Exchange (BOX)
3. Chicago Board Options Exchange (CBOE)
4. International Securities Exchange (ISE)
5. New York Stock Exchange (NYSE)
6. The Philadelphia Stock Exchange (PHLX)
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