Chapter 01 · Section 1.1

OTC vs. Exchange Traded Options

There is a similar distinction to be made between over-the-counter (OTC) options and exchange-traded or listed options. We will now distinguish between OTC options and exchange-traded options

                       OTC OPTIONS      EXCHANGE-TRADED OPTIONS
 

Contract Terms          .........          standard
Delivery                .........          less than 10%
Trading                 .........          centralized
Credit Risk             .........          clearing house
Liquidity               .........          generally high
Margin calls            .........          minimum margin regulated