| "> | | | | and Boston Options Exchange (BOX) are included in |
| Stock option trading can be considered as one of the | | | | the electronic marketplaces. In Europe, the main |
| most financially rewarding strategies one can become | | | | futures and options exchanges are Euronext.liffe and |
| involved in. Sometimes, this becomes a destructive | | | | Eurex. |
| investment plan, though. Stock option is the 'right' to | | | | Another option to trade a stock is the |
| purchase a stock at a given price within a specified | | | | 'over-the-counter' (OTC) trading, which is the |
| time. Stock option trading is largely dependent on | | | | opposite of exchange trading occurring in option |
| certain factors, such as name of the associated | | | | exchanges or futures exchanges. The OTCs are |
| stock, strike price, expiration date, and the premium | | | | traded not in exchanges, but between two |
| paid for the option, plus the stock broker's | | | | independent groups; hence these transfers are the |
| commission. | | | | bi-lateral contracts. In this contract, at least one |
| Stock option trading involves trading standardized | | | | group is typically a large financial organization with a |
| options contracts, which are listed by a variety of | | | | balance sheet big enough to guarantee such a |
| futures and options exchanges. In the United States, | | | | contract. OTCs are administrated by an International |
| there are presently six exchanges where stock | | | | Swaps and Derivatives Association agreement. |
| options are traded, including four open-outcry | | | | Stock option trading, with no intent to ever exercise |
| marketplaces and two electronic marketplaces. The | | | | the option, may be considered as a form of |
| open-outcry marketplaces are Philadelphia Stock | | | | 'leverage'. The 'grant' price (the price of an option) on |
| Exchange (PHLX), American Stock Exchange (AMEX) | | | | a security might increase over the price of the |
| in New York City, the Pacific Exchange (PCX) in San | | | | security itself. For this reason, the entire value of |
| Francisco, and the Chicago Board Options Exchange | | | | trading in options has at times exceeded the total |
| (CBOE). The International Securities Exchange (ISE) | | | | value of trading in stocks themselves. |