Equity FLEX Options
Introduction to CBOE Equity FLEX Options
In 1993 CBOE created and launched FLexible EXchange Options (FLEX Options). FLEX options were originally developed for Index options traders, providing the ability to customize contract terms, while preserving the benefits of exchange traded contracts. FLEX options are now broadly available on Indexes and Equities, including Exchange Traded Funds (ETFs).
Click here for information on Index FLEX Options.
Why FLEX Options?
FLEX options offer investors the ability to custom-tailor most contract terms and to enjoy expanded position limits.
Equity FLEX options offer:
- the ability to create customized equity options -- options on stocks and Exchange Traded Funds that can be designed to fit individual investment strategies and goals
- contract guarantees and virtual elimination of counterparty risk
- no position limits, however reporting obligations do apply
- fully electronic, anonymous trading platform
- price discovery of competitive auction markets
- price transparency of the listed options market
- secondary market to offset or alter positions
OCC's Financial Guarantee
The issuer and guarantor of all FLEX Option contracts is The Options Clearing Corporation (OCC). OCC, founded in 1973, is the world's largest derivatives clearing organization and was the first clearinghouse to receive the "AAA" credit rating from Standard & Poor's Corporation. OCC operates under the jurisdiction of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
While an over-the-counter market exists for customized options, it cannot provide the benefit of OCC issuance and clearance, nor the price transparency and competitive bidding process of Exchange auction markets.
Electronic Trading Platform: CFLEX
Click here for more information about CFLEX