Chapter 01 · Section 1.1

Credit Risk

                    EXCHANGE-TRADED OPTIONS 

Contract Terms             standard
Deliver                    less than 10%
Trading                    centralized
Credit Risk                ...........
Liquidity                  ...........

An exchange-traded options contract is guaranteed:

a) by the counterpart, through a bank guarantee.
• b) by no one. The purchaser assumes all credit risks.
  No. If no one guaranteed performance, people would be less willing to trade in options, or if they did, they would demand some sort of assurance of performance.
  c) by the exchange clearing house.

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