Cboe 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).

Why FLEX Options?

FLEX Options offer investors the ability to custom-tailor most contract terms. Equity FLEX Options offer:

  • the ability to create customized equity options -- options on stocks and ETFs that can be designed to fit individual investment strategies and goals
  • contract guarantees and elimination of counterparty credit risk
  • no position limits, except that certain requirements apply to aggregate FLEX Options with non-FLEX Options for position limit (and exercise limit) purposes; certain reporting obligations also apply
  • fully electronic, anonymous trading platform
  • price discovery of competitive auction markets
  • price transparency of the listed options market
  • secondary market to offset or change positions

OCC Guaranteed Contract Performance

All options contracts traded on U.S. securities exchanges, including FLEX Options, are issued, guaranteed and cleared by The Options Clearing Corporation (OCC). OCC, founded in 1973, is the world's largest derivatives clearing organization. Among other things, OCC is a registered clearing corporation with the Securities and Exchange Commission (SEC) and plays a critical role in the U.S. capital markets as the exclusive clearinghouse for exchange-traded options.

While an over-the-counter market exists for customized options, it does not provide the same benefit of OCC's guarantee of performance to selling and purchasing clearing members of FLEX Options, nor the price transparency and competitive bidding process of Exchange auction markets.

Electronic Trading Platform: Cboe Silexx

Cboe Silexx is Cboe's front-end offering for trading FLEX options on all Cboe-listed products. Click here for a free trial of Cboe Silexx, or contact [email protected] for more information about trading FLEX options on Cboe Silexx.