The Chicago Board Options Exchange CBOE is an exchange used for trading standardized options contracts, including stock options , LEAPS , interest rate options, foreign currency options, and index options.

Originally created in as an extension of the Chicago Board of Trade CBOT , the Chicago Board Options Exchange CBOE became the first exchange to offer standardized options trading. Trading hours on the CBOE are from 8: Central for equities and 8: The CBOE orders are typically entered through a broker-dealer or through an online trading network. The CBOE's Order Routing System collects and distributes orders for up to 2, contracts to floor traders, trading booths, or to the CBOE's order book official.

Most CBOE options are traded in an open outcry system where exchange members act as market makers. This is why the CBOE calls market makers "the backbone of the CBOE's trading system;" Their willingness to risk their own capital provides liquidity to CBOE option trading. Floor brokers on the CBOE act only as agents tasked with executing orders for clients.

Profiting from Options ]. The Options Clearing Corporation OCC issues the options traded on the CBOE and clears the transactions conducted on the exchange. The existence of the OCC allows options traders to buy and sell without knowing the original opposite party.

A company may list its own stock options on the CBOE if certain share count and ownership requirements are met. The CBOE is the 2nd largest options market in the world behind the Korea Stock Exchange KSE.

History

The exchange volume at CBOE easily exceeds million contracts per year. If you are trading options as part of your investing strategy, you are likely dealing with the CBOE on at least some of your transactions.

Chicago Board Options Exchange (CBOE) Definition & Example | Investing Answers

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Chicago Board Options Exchange CBOE. How it works Example: Profiting from Options ] The Options Clearing Corporation OCC issues the options traded on the CBOE and clears the transactions conducted on the exchange. Most Popular Calculators Amortization Schedule Calculator: What Is the Repayment Schedule for My Mortgage?

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