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.
• b) anticipated in only 2-3% of all transactions.
  No. OTC options are more often exercised than exchange traded options.
  c) anticipated in nearly 100% of all transactions.

(Click here for help)