Where are Options Traded?
Option contracts are traded either;
- on a public stock exchange (also known as ETO's (Exchange Traded Options))
- implicity agreed between two parties (also known as OTC's (Over The Counter options)).
The majority of options, however, are traded via public exchange houses and these will be the options discussed throughout this web site. The OTC market is a complicated one, where traders from large institutions can create and trade non-standard option derivatives. They can, for example, add their own special rules such as: if the underlying stock trades as high as x then the contract terminates and the option is then worthless. This is known as a Knockout Option or a Barrier Up and Out Option.
Options are listed and standardized by the stock exchange and are traded by what is known as Serial Months. By standardized, I mean that the specifications that make up the option contracts are set by the stock exchange and cannot be changed.
Here is a snapshot of the August 2005 options for IBM.
The Call options are on the left, while the Put options are listed on the right. Notice the strike prices down the middle? In this case there are 24 contracts available for the public to trade that expire in August 2005. The total number of listed options for IBM at the time of writing (3rd July 2005) are 230. That's 115 call options and 115 put options.
PeterMay 22nd, 2013 at 7:07am
Hi Alexandra,
I do have a Facebook page;
https://www.facebook.com/OptionTradingTips
and Twitter;
https://www.twitter.com/optiontips
Any other questions, don't hesitate to ask!
AlexandraMay 22nd, 2013 at 3:05am
I seldom leave a response, but i did a few searching and wound up here Stock Options - Employee Options and Stock Ownership. And I actually do have a couple of questions for you if it's allright. Is it only me or does it give the impression like a few of the remarks appear as if they are coming from brain dead visitors? :-P And, if you are posting on other online social sites, I'd like to keep up with anything new you have to post. Could you list of the complete urls of all your social pages like your linkedin profile, Facebook page or twitter feed?
PeterAugust 21st, 2011 at 6:18pm
Because the year was 2005.
SHIAugust 21st, 2011 at 12:02am
How on 3rd July it's 230?
PeterAugust 3rd, 2011 at 5:54pm
Mmm..no, do you mean VAR?
Ankush VirulkarAugust 3rd, 2011 at 6:02am
Hi Peter,
Can you tell me what is PAR?
PeterMay 12th, 2011 at 2:28am
You mean electronically? It depends on the broker...some brokers provide their users a free terminal to place orders into the market. And they might also allow you to use a 3rd party application, which can be plugged into their infrastructure.
If your broker doesn't provide a screen for you then you would have to phone them up and speak to a broker in person.
spmt5May 11th, 2011 at 11:55pm
how to place an order?
PeterMay 11th, 2009 at 6:22pm
Hi Brandon, unfortunately I cannot answer that...you will have to check with your broker why you are not filled on an order. Perhaps the stock didn't reach the price you entered? What broker do you use?
BrandonMay 11th, 2009 at 10:22am
Hi would like to ask why sometimes i place an order, it's not filled. how do i check whether there is position in the stock so i can get filled. Thanks!
JoeApril 29th, 2009 at 6:21am
Hi Peter, I understood with your clear explanation,
Thanks and appreciate it :)
PeterApril 27th, 2009 at 5:21am
Hi Joe, no problem about the question.
You cannot see the total number of options traded across all expirations in the screen shot above...you can only see the August 2005 options.
In August you can see that there are 12 strikes, which means 24 contracts (12 call options and 12 put options).
There are also options in the other expiration months, Jul 05, Oct 05, Jan 06, Jan 07 and Jan 08. In total there were 230 contracts (115 strikes).
The link below shows the current options on IBM.
joeApril 26th, 2009 at 10:52pm
Hi, I am sorry if I ask the same question that Sien asked before.
I don't see there are 230 options as well. Can you guide me? the answer from Admin also doesnt help me. thanks heap
AdminMarch 23rd, 2009 at 5:46am
Hi Sien,
You can see the current list of options for IBM here:
https://finance.yahoo.com/q/op?s=IBM
SienMarch 23rd, 2009 at 4:07am
Hi, how can I see there are 230 options from the snapshot? Thanks
AdminFebruary 3rd, 2009 at 4:10pm
Hi Ivey, from the IBM screen shot above. There are 12 calls and 12 puts in August for a total of 24 contracts.
A IveyFebruary 3rd, 2009 at 6:52am
Where did you get the number 24 for public options available to trade from?
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