Info 1: Option exchange definition
Info 2: how option exchanges works
Info 3: Option and futures exchanges
Info 4: Example of option exchange
Quick pick:
Any of the place of industry that offer the platform for trading the choicest contract on different kind of public Securities with government authorization are known as option exchanges and it’s located based on were such platform exist to offer to the general public.
Opening information:
Option exchange breaks into tw words option and exchange. Option is choice, exchange is inter change. Option exchange means choice of item that inter change.
This article occupied the information about what is option exchange, how the option exchange works and involved in the public market, and what is the difference between the option exchange and future exchange, finally one brief example below.
Info 1: Option exchange definition
Mr.Kathim is a business man who is CEO of his own investment industry, his big purpose is to manage the multi million dollars.
However his investing takes place three kind of assets. one in stocks, another one is commodities, third would be option contract in exchange industry that provide and offer the rights to purchase and not purchase the certain public Securities.
He would trade this each of the public Securities in separated exchange industry. Which that exchange industry offer and list the option contract are named as option exchange.
Because not all exchanges around the world would list and provided the option trade platform as derivatives legally, some would offer the separate exchange for trade the options but some other exchange yield the joint platforms with stock exchange legally.
Like Mr.Kathim investment manager this same concept would be applied to all the kind of public Securities. So lets dive into know how this option exchange works involved and functioned in the public market.
Info 2: how option exchanges works
Option exchanges doesn’t represent any of the specific thing or object instead they are Industries which are offer to trade the contract with back end value of any public securities.
Which that exchanges providing industry are not a issue any stock indeed it’s main purpose rely on offer the platform to speculate on the market price fluctuation.
Supposed if the industry didn’t provide the place for trade the contract with choice of option despite trade physical securities they are not consider as option exchanges.
However option exchanges is all over the world each of the countries would had separate option for exchanges on their own and all of them had distinct market rules but with core rules of trading with contract.
Moreover in United States of America, the Chicago Board Options Exchange is the one of the popular option Exchanges industry were offer option contract platform and other some stock exchange also offer option platform with joint such as New York stock exchange and Nasdaq.
When comes to other than USA, most of the countries like England, Switzerland, India had occupied option platform in the stock exchange with jointly and their is less number of separated exchanges for option.
In European continent Germany based “Eurex” option separated exchange Industry which offer the option contract for multiple amount of equities stocks. People’s who are investors and retail traders would directly align to certain exchange or option broker.
On the other hand, Montreal option exchange which is offer the option market platform for investors and traders. Next In United kingdom, the London International Financial option Exchanges is the most popular and trade among the England people’s but such industry offer the futures contract too.
Most of people’s confuse the option Exchanges and futures exchanges, so lets jump into know the key difference in it anyway.
Info 3: Option and futures exchanges
The option is a derivatives contract which helps to trade the security with choice full agreement to purchase or not purchase securities at end of the deal. So the options had could be offer in futures commodities exchanges too.
On the other side, futures also the derivatives contract but they won’t offered in the separated in exchanges because commodities mostly involve in futures.
So the option and futures are not same thing but option had joint platform with any kind of exchanges too.
Info 4: Example of option exchange
Say you and your brother is option trader but to notify that your trading in which exchanges, you done a search about your broker.
For the reason most of the brokers in the public platform offer the multiple kind of platform in one place such as stock, commodities, derivatives extra…
Imagine that your brother broker offered the platform for option but such option trading platform is not offered and provided by separated exchange indeed it’s provided joint option platform. And your broker offer the option platform but with exchange that only listed the option.
Here in this short example two of the exchanges with separated option exchange and option that provide with stock exchange are came in the section of option exchange.