Chapter 01 · Section 1.1

Delivery

                       OTC OPTIONS      EXCHANGE-TRADED OPTIONS
 

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

With OTC Options, delivery is:

• a) anticipated in perhaps 50% of all transactions.
  Yes. An OTC option does not necessarily give the holder the possibility to resell his option at an appealing price. This is why OTC options are more usually exercised than exchange-traded options Continue
  b) anticipated in only 2-3% of all transactions.
  c) anticipated in nearly 100% of all transactions.

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