Options trading strategies. Organization of option trading

Trading on exchanges for new options opens every three months. Only those options based on the underlying shares selected by the exchange administration can be admitted to exchange trading.

Companies whose shares can be sold or bought must not have a violation of the payment of dividends for a certain period of time and, in addition, must be listed on the stock exchange for at least two years. There are also requirements for the size of the company itself. Once trading has started, new options may be offered on the same terms but at different strike prices. This happens if the stock price of the issuing company increases or decreases and at the same time goes beyond the original interval.

Options trading continues until the contract expires. Clients can give the same orders (bids) as for shares, i.e. as shown earlier - market, limit, stop-order and stop-limit. At the same time, the execution of orders for options is somewhat different from the technique for executing orders for shares.

There are also differences in the organization of trade, which is carried out mainly by the "free cry" method. At the same time, in the USA there are two options trading systems with the participation of specialists and market makers.

Specialists, as a rule, perform two functions in options trading: they act both as dealers and as brokers. Acting as dealers, they hold stocks of shares for which they are responsible, and set prices when buying and selling. When participating as brokers, they have a limit order book. There are also stock traders (floor traders) on a number of option exchanges who trade only at their own expense, buying at low and selling at high prices contracts, and stockbrokers who take orders from clients.

Market makers act only as dealers and limit book holders who hold a limit order book. Having a stock of option contracts, market makers are engaged in quoting, announcing the prices for selling and buying shares. Moreover, if a specialist works with only one given stock, then several market makers deal with stock options. At the same time, the market maker is prohibited from executing clients' orders on the option assigned to it, i.e. act as a broker in this case. However, he is not prohibited from executing such orders for other options.

It should be noted that intermediaries of any legal and individuals who need brokerage services to purchase or sell options, as well as brokerage and dealer firms. At the same time, the work of intermediaries is paid directly by clients, while the activities of broker-dealer firms are carried out at the expense of their own funds, and most of the member firms of the exchanges combines brokerage and dealer functions, acting solely in the interests of their firms. Brokers wishing in some cases to perform dealer functions, in without fail must obtain a registration attachment to two types of underlying shares of their choice. This registration attachment allows brokers to place an order to buy and sell at least one option in each series on these shares.

In addition to this mandatory participation, they have the right to trade in all other option classes at their discretion.

The holder of the limit order book is not allowed to participate in the trade. He can only introduce limit orders to other members of the exchange. Since options are traded in one or more sections of the exchange floor or in a separate room convenient for brokers and dealers to monitor individual stock transactions, the limit order book holder is located directly on the trading floor.

Like stock exchanges, all options exchanges are continuous markets, i.e. orders are executed at any time when the exchange is open.

Options trading starts with rotation, i.e. clarification of the option price per 1 share depending on the option type, delivery month and exercise price. The exchange official, acting as a manager, successively achieves transactions from series to series until he exhausts the entire class. All dealers must not only take part, but at any time, when the need arises, start an additional rotation. During the rotation for any one series, proposals for other transactions are not considered.

Starting with a rotation during which the submission of applications from intermediaries stops, the steward announces maximum price demand and the minimum bid price, which is the options quote at the beginning of the day. Depending on the bidders, the reaction to the announced quotations may be perceived by new convergent offer prices. At the same time, some brokers may receive an order “at their discretion” from their clients.

After the first deal has passed, the manager will offer everyone who wants to conclude other deals at this price (but not at other prices), after which he moves on to the next series, and so on. After the end of the rotation, all its participants can make offers for the purchase and sale in any series and in accordance with certain regulations inherent in a particular exchange. The essence of the regulation is the implementation of certain rules when making transactions by dealers and brokers.

The manager in option trading, along with the organization of rotation, can stop trading if necessary. These reasons include:

· no transactions with underlying shares of this class;

· rapid change in prices for options, which does not allow broker-dealer firms to fulfill customer orders;

the occurrence of certain circumstances that impede the implementation of transactions.

The resumption of options trading must necessarily begin with a rotation and be completed before the expiration of the contract. For example, US common stock options typically expire at 10:59 pm. U.S. time on the Saturday after the third Friday of the corresponding month.

Options trading on exchanges is greatly facilitated by the standard nature of contracts.

Options trading can also take place over the counter, in the so-called over-the-counter or free market. There are no standards and restrictions here, except for those that relate to the general rules and regulations established by the federal authorities for securities transactions and the work of broker-dealer firms. The size of the option contract depends on the agreement of the parties, but the most commonly used trading unit is 100 shares. Moreover, the shares may or may not be included in the list of those admitted to exchange trading, i.е. these can be shares, transactions with which are carried out only outside the stock exchanges. However, they must have an official registered status.

Another important feature of the over-the-counter stock market is the ability to include any additional conditions in the contract and thereby find a compromise between the selling and buying parties.

The OTC option trading technology may include, for example, the previously mentioned computerized system in which certain options exist in memory.

With the help of such a system, the position of each investor is tracked and the parties interested in the transaction are selected. The system performs a full range of operations, including the issuance of a notice of the execution of the transaction and the guarantee of the delivery of shares.

There are also special brokerage firms that match buyers and sellers of options. After obtaining the consent of the contracting parties, the firm-endorser enters into the matter, which assumes guarantees for the fulfillment by the parties of their obligations. Acting as an intermediary and guarantor, the firm seeks to receive margin and premium from the option subscriber, which are taken into account both when the parties fulfill and fail to fulfill their obligations. The functions of the endorser are performed by the clearing corporation, which carries out mutual offsets between the parties and the final settlement of transactions.

The over-the-counter market tightly binds the parties entering into option contracts, without giving them the opportunity to change the original conditions. This is largely due to the computerized system, which does not provide for the possible maneuvers of the parties when analyzing the terms of the contract.

On the other hand, with all the advantages of the over-the-counter market, unlike exchange trading, it requires more time for a transaction. Apparently, this can explain the fact that intermediary services on the over-the-counter market are 1.5-2.5 times higher than on the stock exchange.

The table below shows the main indicators of options trading (Table 10.1).

Table 10.1 Indicators of exchange and OTC options trading

Indicators	Exchange	OTC market
1. Types of options	Buy, Sell, Combinations	To buy, to sell, combinations, additional conditions
2. Strike price	Must end in 0, 2.5, or 5 (in dollars). The price of new series is introduced according to special rules	Any by agreement of the parties
3. Life span	3, 6, 9 months	Any within 9 months by agreement of the parties
4. Start of action	Beginning of the month	Any date
5. Renewal	Not allowed	Allowed with the consent of the subscriber
6. Restrictions on the purchase and sale of options with these underlying shares one person	Set by the exchange administration (usually 1000 option contracts per type	Missing
7. Trade item	1000, rarely 100 shares	Any, but in practice 100 shares are most often used
3. Shares eligible for options	Subject to special selection (in the USA their number at the beginning of the 90s was a little over 200)	Any
9. Secondary market (resale)	Very active	Very limited; relevant offers are made through special newspaper advertisements
10. Guarantor of performance of the contract	Clearing corporation (center) functionally connected with the exchange	Brokerage endorser firm
eleven . Information about current prices	Presented in daily reports on exchange transactions	Published in print as indicative prices
15. Transaction brokerage fees	Moderate	high
16. Taxation of income from transactions	Carried out according to the general rules

Completing the lighting in the main foreign experience trading options, it should be noted that the options market in Russia is in the development stage, trading is conducted but the shares of only 10-15 issuers (1998). The main obstacles in his path are.

– financial instrument, which stands out among other popular assets, primarily due to its versatility. However, in the course of option trading, it is important not to forget about the main rule of trading - consistency. This means that for stable profit generation, the investor will need to choose an effective strategy.

Today, on the Internet you can find a huge number of various trading systems, including those based on optional Greeks. However, if you are new to this market, it is best to start by learning the basic tactics. Believe guided by the most simple diagrams, you can achieve quite high results.

Trading Strategies of Simple Buying and Selling Call Options?

First, you need to start with the fact that the option has two prices - at the time of purchase and at the time of expiration. Therefore, if at the time of purchasing a contract, for example, it is in a profitable zone, this does not mean that it must be held until destruction. After all, expiration is often accompanied by a huge loss.

This strategy is very simple because it works on the same principles as on other trading platforms. The Call option should be bought at the moment when the value is expected to rise. It is important that after the purchase, the price continues to move. Therefore, if after the purchase of the contract the value has increased slightly, do not wait for expiration, try to sell the option and earn on the difference in purchase and sale.

We figured out the purchase, now let's talk about the features of selling a Call option.

Selling an option naked is a very risky trade, especially for a beginner who doesn't understand exactly what to do. Basically, pseudo experts scare novice option traders with unlimited losses, but the same can be said about other stock exchanges. For example, futures trading is no less risky than options trading.

If an investor understands the system for selling option contracts, then he will be able to save his deposit from unnecessary risk. When an option is sold, the trader is acting as an insurance company, hence the well-known term "write an option". The investor receives a premium for selling the option.

Until 2012, after the sale of an option, a premium was immediately credited to the trader's account. However, it could easily melt away if the value went against the investor. However, since 2012, margined option contracts have appeared on Russian trading floors. This means that immediately after the sale, the money is not credited to the account, on the contrary, a calculation is carried out, according to which the trader receives a variation profit depending on the value movement vector.

It is necessary to sell Call options at the moment when you think that the price will not rise, in other words, the quotes will go down or not budge at all. The trader's key motive in this situation is to earn a premium.

It is not always possible for traders to predict the direction of the market movement with maximum accuracy. In such situations, it is important to fix losses in a timely manner in order to exit a losing trade with a minimum drawdown.

The formation of a global trend can significantly hit the investor's trading account, in this regard, it is more expedient to close a deal in the glass and lose 2,000 rubles than to wait for some time and eventually lose 15,000 rubles.

Simple purchase and sale of an exchange put option

Working with Put options is based on the fact that the investor predicts a collapse in the value of a financial asset. At first, it may seem that it is more efficient to simply sell the Call contract. However, this is not the case, because this kind of decision limits the profitability of the transaction only to the premium.

Thus, from the above, we can conclude. If you think the value of the traded asset will remain the same or fall by 2-3%, sell the Call option. However, if you expect a protracted crisis that will become the foundation for a downtrend, be sure to buy a Put contract. In this case, the loss is limited to cash, which is paid out as a premium.

The fall in the value of a financial asset is accompanied by a significant increase in volatility, of course, this is another argument in favor of trading Put options. As a rule, an increase in volatility also leads to an increase in the price of contracts of this type.

You can also earn money by selling Put contracts. However, the conditions for such activity are radically opposite, in other words, the investor should sell the Put option in cases where he is sure that the value of the traded financial asset will no longer decrease.

Call-Spread Options Trading Strategy

The essence of this trading model is to simultaneously buy and sell a Call option. For example, an investor buys a Call contract at a strike price of 59 pips and spends 10,000 pips. When the quotes reach, for example, 67 strike prices, this contract is sold.

As a result, the investor will cover the funds spent on the purchase with the funds received from the sale of the option and the premium, if the contract closes in the range from 59 to 67 strike prices. The proposed figures are characterized by a profit in the amount of 2000 points, of course, this is far from the highest profitability. Therefore, before using the Call-Spread strategy, it is necessary to carefully consider the feasibility of using this trading system.

Conclusion

Basic stock options trading strategies significantly different from trading systems in the currency, stock or commodity market. First of all, this is due to the fact that option contracts are not linear instruments, which means that you can use strengths option.

Topic 7. Options

Options are concluded both on the exchange and on the over-the-counter market. Until 1973, trading was conducted on the over-the-counter market.

In April 1973, options were traded on the Chicago Board Options Exchange for the first time. In recent years, options have been traded on the American, Pacific, Philadelphia, and New York Stock Exchanges. Exchange option contracts are standards, i.e. are concluded for a standard period, include one full lot of an asset (stocks, bonds, currencies).

There are two options trading systems on the stock exchange. The main difference between them is whether trading is organized with the participation of "specialists" or market makers.

In particular, on the American Stock Exchange, trading is organized with the help of specialists who perform two functions: they act simultaneously as dealers and brokers. The "specialists" are assigned to deal in certain option contracts and act as dealers and brokers for them. Stock exchanges can be operated by stock traders who trade only at their own expense, buying at low prices and selling at high prices, and stockbrokers who follow the orders of clients.

On the Chicago Board Options Exchange, the market is organized by market makers who act only as dealers. Holders of limit books, who have a book of limit orders, also participate in the trades.

Market makers must trade with brokers who are members of the exchange and execute clients' orders. Market makers have a stock of options contracts and quote them with the announcement of the ask price and the ask price. As a rule, several market makers deal with options on a particular asset. A market maker is prohibited from executing clients' orders for options assigned to it, but it can execute such orders for other options.

The holder of the limit order book is not allowed to participate in the trade. Unlike "specialists", he can show the book of limit orders to other members of the exchange. The holder of the book of orders is located at the trading post (place in trading floor exchanges where securities with similar characteristics are traded) where the options assigned to it are traded. All orders must be executed at the trading post by "shouting", which means that the auction is conducted verbally.

All options exchanges are continuous markets - orders can be executed at any time during the operation of the exchange

Investors who trade options with the help of brokers pay a commission, which consists of two parts:

Fixed commission when buying or selling an option;

Percentage of the transaction amount.

If the contract is executed, the investor again pays a commission.

The buyer of the option is obliged to fully pay the option the next day after the purchase of the option. The investor transfers the premium amount to the broker, the broker credits the premium amount to an account with the clearing house, and the clearing house transfers the premium to the option writer's broker.

Since only the seller of the option (the investor holding a short position) bears obligations under the option contract, he is obliged to transfer the guarantee (collateral) fee or margin to the clearing house.

In case it is issued covered call option (covered call writing), i.e. when the seller of the option owns the underlying shares, he does not have to post a cash deposit. On the contrary, the premium paid by the buyer is transferred to him. The seller's shares are held by the broker until the expiration of the contract. If the buyer decides to exercise the option, then the required shares will be ready for delivery.

If issued uncovered call option (naked call writing) , those. the seller of the option does not hold the underlying shares, then margin conditions are more complex. One of the digits is determined, which will be greater:

The first is equal to the option premium plus 20% market value underlying shares, minus the difference between the strike price of the option and the market price of the shares (provided that the exercise price is greater than the market price of the share);

The second is equal to the sum of the option premium and 10% of the market value of the underlying shares.

Example. The investor writes a call option and receives a $3 premium per share. The strike price of the option is $60. If the underlying stock sells for $58, then the margin will be the larger of the two numbers calculated below.

Method 1.

The option premium is $300 ($3×100);

20% of the market value of the shares $1160 (0.20 × $58 × 100);

The excess of the strike price of the option over the market value of the share $200 [($60 - $58) × 100];

Difference ($1160 - $200) = $960;

Total $960 + $300 = $1260.

Method 2.

The option premium is $300 ($3 × 100);

10% share market value $580 (0.10 × $58 × 100)$

Only $880.

Since the first method gives a larger number, the first result is used. The seller must transfer $1260 to the broker. Since a premium can be used for this purpose, the seller is only really required to deposit $960.

Margin requirements for put options are similar. If the account of the seller of the put option in brokerage firm there is cash (or other securities) equal to the exercise price of the put option, no margin is required. In addition, the seller can withdraw from the account an amount of money equal to the premium received from the buyer, because. the account continues to have collateral equal in value to the strike price of the option. If there is no seller on the account Money, such an option is called uncovered put option (naked put writing). The amount of margin required from such a seller is calculated in the same way as in the case of an uncovered call option.

There is exchange and over-the-counter option trading.

OTC contracts are not standard and are concluded with the help of brokers or dealers. Exchange options trading was opened in April 1973 on the Chicago Board Options Exchange (CBOE) and is organized like a futures. Exchange options in their variety are predominantly American. Contracts are named after the month they expire. Therefore, an option expiring in June is called a June option.

Stock options are basically short-term contracts. It usually takes 9 months from the moment the contract is opened by the exchange until its expiration. However, there are also long-term options, which are concluded for up to three years. They are called LEAPS (long term anticipation securities). LEAPS are American options.

Exchange options, like futures, are standard contracts for each underlying asset. This means that bidders only agree on the price of the option. All other conditions are set by the exchange.

Recently, competition between exchanges has led to the emergence of exchange-traded non-standard options. For example, the parties to a contract may agree on a different strike price or option expiration time than the standard terms. Such contracts are called flex options.

The buyer of an option pays a premium when opening a position. The seller is required to pay the initial margin. When the current rate of the underlying asset changes, the margin will change to ensure that the option is exercised by the seller. When an option is exercised, the clearing house randomly selects the person with a short position in the option contract and instructs him to act in accordance with the terms of the contract.

Many exchanges have a system of market makers who provide quotes for option contracts on an ongoing basis. At any time, they are ready to buy and sell options at these prices. This mechanism increases the liquidity of option trading. The exchange sets limits on the spread between seller and buyer quotes, which market makers can name.

For the same underlying asset, the exchange may simultaneously offer several option contracts, which may differ from each other in both the strike price and expiration dates. All options are of the same type, i.e. call or put, on one underlying asset is called an option class. Options of the same class with the same exercise price and contract expiration date form an option series.

An investor who has bought or sold an option can close his position with an offset trade. When a new contract is concluded, the number of existing contracts on the exchange increases by one. When an offset transaction is made by only one investor, the number of concluded contracts remains the same. If two persons who have opposite positions enter into offset transactions, then the number of contracts decreases by one.

In order to reduce the influence of any investor on the market conditions, the exchange sets two restrictions for each type of option: a position limit and an exercise limit.

The position limit determines the maximum number of contracts an investor can open on each side of the market.

In this case, one side of the market is a long call and a short put, and the other side is a short call and a long put.

The execution limit sets the maximum number of contracts that can be executed by the investor within a certain time.

When concluding an option, the client pays a commission to the broker. When the option is exercised, the investor again pays a commission to the broker.

The underlying asset of an option contract can be a futures contract. In this case, when the call option on the futures is exercised, the buyer opens a long position on the futures contract, and he receives a profit due to the difference between the quoted futures price of the current day and the strike price. The seller of the option takes a short position in the futures contract and is charged a loss equal to the difference between the quoted futures price and the strike price.

Example 8.6. The exercise price of an option on a futures contract per share is 100 rubles. Quoted futures price today is 120 rubles. The buyer exercised the option. This means that he was long a futures contract per share and received 20 rubles of positive variation margin for each share included in the contract. If the futures includes 100 shares, then the option holder received 2000 rubles. variation margin. The seller of the option was shorted the futures and was charged the specified amount of variation margin. Investors can then exit their futures positions in the market in the normal way using offset trades or keep them open until the contract expires.

When a put option on a futures is exercised, the buyer of the option enters a short position on the futures contract and receives a positive variation margin equal to the difference between the strike price and the current day's quoted price. The seller of the option opens a long futures position and the specified amount of variation margin is debited from him.

Example 8.7. The exercise price of an option on a futures contract per share is 100 rubles. Quoted futures price is 80 rubles. The buyer exercised the option. This means that a short position was opened for him in a futures contract for a share and he received 20 rubles. positive variation margin on each share included in the contract. The seller of the option was long the futures and was charged the specified amount of variation margin. Investors can then exit their futures positions in the market in the normal way using offset trades or keep them open until the contract expires.

When exercising an option on a futures contract, one should keep in mind the following possible situation, which we will illustrate in Example 8.8.

Example 8.8. An investor bought an American call option on a 100-share futures contract. The current futures price is equal to the strike price and amounts to 100 rubles. The option premium is 5 rubles. per share or 500 rubles. for the contract.

The next day (Tuesday) the futures price rose, so the option holder gave the broker an order to exercise the contract. The option is exercised at the end of the trading day at the quoted futures price on Tuesday, which is equal to 120 rubles. Thus, the buyer of the option received a gain in the amount of:

100 shares (120 rubles - 100 rubles) - 500 rubles. = 1500 rubles.

These funds actually appear on his account the next day, i.е. Wednesday morning. Also on Wednesday, he will have an open long position in the futures contract.

Suppose that on Tuesday after the close of the stock exchange, events occurred that should lead to a strong drop in prices in the market. Therefore, on Wednesday morning, the stock futures opened at a price of 80 rubles. As a result, instead of winning the option of 1500 rubles. the investor incurs losses on the futures contract due to the fall in the futures price.

To avoid this situation, the option holder on Tuesday should do the following: give an order to exercise the option and sell the futures. As a result of exercising the option, he will open a long position in the futures, but it will be immediately closed, since the sale of the futures was in this case an offset transaction. Accordingly, the variation margin will be determined based on the selling price of the futures and the strike price. Suppose that on Tuesday the futures was sold at a price of 122 rubles. Then the investor's payoff was:

100 shares (122 rubles - 100 rubles) - 500 rubles. = 1700 rubles.

At the conclusion of the contract, the buyer of the option must pay a premium. This order of organization of trade is the most characteristic. However, for options on futures contracts, as in futures trading, there is also a system of initial margining by both the seller and the buyer.

In domestic practice, the leading exchange where option contracts are concluded is the RTS Stock Exchange. Options are concluded on futures contracts. At the time of writing this book, the exchange offered options on futures contracts for the shares of RAO UES, Gazprom, Lukoil, Rostelecom, a futures contract for the US dollar. Options for futures on shares of RAO UES are most actively traded.

Option contracts for share futures have a similar structure, therefore, as an example, we will cite the main terms of an option for a futures contract for RAO UES shares.

The option includes one futures contract and is American. Delivery contract. The minimum change in the premium under the contract is 1 rub.

When the exchange opens trading in a new temporary contract, within its framework, it offers market participants to enter into contracts with different strike prices. There is a constant interval between strike prices.

For example, at the time of writing this book, for an option on a futures contract on RAO UES shares it was 500 rubles, for an option on a futures contract on Rostelecom shares it was 250 rubles.

Thus, for an option on a September 2005 futures contract for RAO UES shares, the stock exchange offered September options starting from the exercise price of 6,000 rubles. and so on with an interval of 500 rubles. up to 10.000 rub. In general, the interval between strike prices depends on the price level of the underlying asset. For example, in the United States, for stock options, the interval between exercise prices is $2.5 for stocks worth $25 and below, $5 for stocks above $25 and up to and including $200, and $10 for stocks worth $25 and below. shares over $200

During the duration of this time contract, the spot rate of the underlying asset may exceed or fall below the stated highest or lowest strike prices, respectively. Then the exchange, within the framework of this temporary contract, adds new execution prices.

This review is mostly devoted to those skeptics who claim that binary options are the plan of cunning brokers who themselves invented this supposedly exchange instrument in order to extract money from gullible people.

Here we will talk about trading options on the stock exchange, that is, not with a broker, but on a real stock and currency exchange. Yes, yes, that happens too. Options were not invented in 2008, as many people think, but much earlier, brokers just simplified the process a bit in order to make this type of income accessible to a wide audience.

So, the topic of our review is on which exchange binary options are traded, and what this process looks like.

A bit of history

And before moving on to a detailed review of the exchanges, let's dive a little into history. No, not in 2008, and not even in the era of the gold rush, but much further.

3000 years ago, in Greece, such a story was noted. In it, a little-known philosopher named Falias, entered into a contract with a factory that produces olive oil. He offered the owner to invest in his business on the terms that if the next year's olive harvest was greater than this year, then he would receive a share of the property. If, on the contrary, production decreases, then Falias has no claims on his money and they go to the owner free of charge.

Such an investment seemed tempting to the owner, and he agreed to the terms of Folias, and to next year olive harvest exceeded all expectations. Folias's share in the factory increased several times as production increased, and he himself, not wanting to become a business man, simply sold his share, thus multiplying his initial investment many times over.

This is the first mention in the history of option trading, and later this system was adopted by American loan sharks, who entered into agreements with gold miners on the rate of the mined metal and quickly enriched themselves on this. Unfortunately, we will never know their names, since most of these dealers disappeared without a trace after they started winning money from the harsh metal miners.

Options trading exchanges

Later, all in the same America, stock exchanges began to open. Some traded stock assets, that is, stocks and bonds, and foreign exchange, dealing with the exchange of one currency for another.

Both of them quickly began to get rich and earn on their speculations, and in 1978 the new word option was first mentioned.

At first, the people accepted the instrument rather coldly, since the conditions were incomprehensible even to a stock clerk, but over time, speculators appreciated all the possibilities of such contracts, and stock binary options began to appear on other sites, and here are some of them.

OWN

It was on this exchange that the mention of binary options first appeared. It was on this platform, located in Chicago, that contracts for the growth or fall of stocks with a fixed life were first sold.

The date of birth of option contracts is taken to be 1973. Initially, this organization was called the Chicago Chamber of Commerce and traded futures, but as soon as a new mechanism appeared, which was called an option, the board decided to open a new platform focused on working exclusively with this asset.

Interesting! CBOE is a branch of the Chicago company, but here trading is carried out only by contracts with expiration, so if we talk specifically about the exchange of binary contracts, then this is CBOE. All other sites combine options and other instruments for investment and speculation.

Today, CBOE is the largest and most famous options exchange, it was from here that this instrument began to spread around the world, but primarily in America, and from there it moved to Europe and finally to Russia and Asia, where this instrument appeared much later.

PHLX

If CBOE is a fairly new exchange, then the PHLX exchange is an old company that appeared in Philadelphia as far back as 1911. Later, already in the 80s of the 20th century, the exchange appeared new tool- binary options.

This site initially had two directions:

1. Gold mining companies and their shares
2. Semiconductor manufacturers

Accordingly, it is here that precious metals are traded and it is here that the shares of the largest manufacturers of electronic systems are quoted.

Today it is the largest platform uniting thousands of financial companies and considered the center of the American economy. It is here that they are the first to react to market changes, and it is from here that the most important news arrives, to which the entire market reacts, including us, ordinary traders.

Indices for precious metals are also formed here:

• Gold
• Silver
• Palladium
• Tungsten

And many others. It is from this platform that the suppliers that we see in our trading terminals take their quotes.

Eurex

Relatively young, but one of the largest trading floors in the world. European Options Exchange. It appeared only in 1997, after the merger of two corporations:

1. Deutsche Terminborse
2. Swiss Options and Financial Futures

At Eurex, exchange-traded options are traded exclusively in in electronic format, that is, there are no holes. Assets are mostly stocks, and their list is impressive:

• EURO STOXX 50
• STOXX Europe 600
• Dow Jones Global Titans 50
• TecDAX
• OMX Helsinki 25
• RDXxt USD

Initially, she dealt only with classic contracts, but in 2005 stock exchange binary options appeared in the arsenal.

Interesting! hallmark This particular platform is the fact that anyone can become its client, and for this you do not need to obtain accreditation and a broker's license, as is most often the case on other platforms.

To date, Eurex is considered a unified exchange, which includes several companies at once, each of which trades options on the exchange. A separate area is the OTC market, that is, over-the-counter trading, which in our country is usually called contemptuously - "kitchen".

MICEX

A holding or association that appeared on the market in 2011 after the merger of the two largest Russian sites:

1. RTS. commodity exchange
2. And the MICEX Interbank Currency Exchange.

The new holding remained with the old name, but the arsenal expanded significantly, since the two sites separately occupied completely different niches.

Interesting! Despite the combination of these two sites, their indices are calculated differently. For example, the MICEX index is calculated only in Russian rubles, while on the RTS the quotes are in dollars.

After such a restructuring, binary and options trading on the exchange appeared here, as well as a board. Here you can buy a contract to increase or decrease the prices of the largest Russian companies, having a listing on the MICEX, and these are such names as:

• Gazprom
• Lukoil
• Aeroflot
• nornickel
• Rosneft
• Sberbank

And many others. In addition, currency assets are traded here, and the list is quite extensive, in addition to the Russian ruble, US dollar and euro, you can invest, for example, in the British pound or Japanese yen.

Exchange-mediated option trading

Of course, options trading on the stock exchange is different from what ordinary traders are used to. There are no usual charts and one-click trading, and each contract is not just an oral transaction between a trader and a broker, but a purchase of a security.

Yes, yes, that's right, the deal has a material shell. This is a security in which the main aspects are spelled out:

• Assets
• Expiration
• Price
• Cost forecast.

Moreover, if in binary options we can, in fact, conclude only two types of transactions, that is, buy options to increase or decrease, then there are four positions on the stock exchange:

1. Buy an up trade
2. Sell ​​an up trade
3. Buy a down option
4. Sell ​​a stock option for a fall.

Simply put, contracts are limited in number, and if they are all sold out, as is often the case with popular deals, then it will no longer be possible to buy it until someone decides to sell it.

For example, we buy a contract for 100 thousand dollars. We have six months of expiration, but after two months there are doubts that our bet will play. The best option in this case, sell the contract. And we put it up for auction. In this case, we already set the price ourselves, and if the price of the asset is in this moment is in our direction, then the value can be increased, and thereby earn by selling the option.

If the asset went in a different direction, then interest in it falls accordingly, and we try to sell it at a lower cost, thereby returning at least part of the profit.

Often, the exchange itself acts as a buyer, but only if it sees potential interest in such an acquisition.

Options board

There are also no charts familiar to us on the options exchange, and all trading is carried out on the so-called board. This is a list of all contracts currently available for sale.

It is here that we make deals and it is here that we post the announcement of the sale of contracts ahead of schedule.

Also, all information about the transaction is published here, that is, its face value and expiration date. By the way, there can be no question of any turbo contracts, the minimum expiration that can be found on the options exchange is one week. Most often, transactions are concluded for several months, or even years.

All this makes trading options on the stock exchange not so attractive for the average user, and it’s impossible to just come from the street and buy some kind of contract, you need special accreditation and access. That is why binary transactions are so popular, and here are just some of their advantages:

• Expiration. As we said above, options trading on the exchange is carried out only with a very large expiration, from a week onwards.
• Yield. There is no 80% of a successful transaction on the exchange. The average return on each contract is about 10 percent.
• High price. It's in binary trading that you can come in with $10 in your pocket and start working. On the exchange, the prices are completely different, and even with a thousand dollars there is nothing to do there.
• Simplicity. Registration on the broker's website takes at most two minutes. Replenishment of the deposit is another minute, that is, after a maximum of five minutes you can start trading. On the stock exchange, this process looks much more complicated.
• Convenience. We trade binary while sitting at home, and just looking at the chart. There we will have to participate in the life of the stock exchange.

Simply put, binary options, in the form in which we know them, is a kind of simplified version of those exchange contacts. It's just that everything here is set up for ordinary users, that is, for you and me. While the exchange is the prerogative of specialists and large investors. Perhaps, for some, the exchange is the next step in their career, but you should start with binaries, and it is from them that you get to know the market and its features.

And even more so, you should not climb into the stock exchange without having full knowledge and skills. If sharks are already sitting in binars, ready to swallow you whole, then the fish there are much larger and it will be very difficult to compete with them on equal terms.

Conclusion

So, we figured out on which exchange binary options are traded, and as you can see, there are not so few of them. As they say, checkmate and skeptics who claim that all this is just another scam.

Yes, option brokers do not withdraw money to real platforms, but this is only beneficial for us, users, since there are no spreads and exchange commissions. If they were included, there would be no question of any 10 dollar deposits, and trading would remain the lot of the elite. Those who received special education and has an authorized capital of several hundred thousand dollars.

The binary market is just different, and there is nothing wrong with that, quite the contrary. Now everyone can try their hand at trading and already clearly decide for themselves whether they are ready to do this, or it’s just not for them and it’s not worth wasting time, effort and money.

And haters and spiteful critics, as they will always be, this is how our world works, and it is worth noting that the appearance of options on the stock exchange at one time was also regarded as a collapse economic system, but nothing, we are all still alive and well, like the world economy.