Chapter 02 · Section 2.1
Exchange traded options
The premium(or price of the option) is the compensation paid by the option buyer to the option seller (or option writer).
The exercise price is the price at which the underlying asset will change hands if the option holder decides to exercise the option.
Which of the following contract terms of exchange-traded options is not standardized or fixed?
b) Exercise price
No. Each exchange fixes the exercise price of options traded on its floor. For example, the CBOE sets exercise prices at 10 point intervals on the up and down side of the market price of underlying securities trading above $200.
c) Expiration
d) Premium
a) Contract size
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