c. Issuing options provides companies with a low cost method of raising
capital.
The most common way to trade options is via standardized options contracts that are listed by various
futures and options exchanges.
[16] Listings and prices are tracked and can be looked up by
ticker symbol. By publishing continuous, live markets for option prices, an exchange enables independent parties to
engage in
price discovery and execute transactions. As an intermediary to both sides of the transaction, the benefits the exchange
provides to the transaction include:
fulfillment of the contract is backed by the credit of the exchange, which typically has the highest
rating (AAA,counter parties remain anonymous,enforcement of market regulation to ensure fairness and transparency, and maintenance of orderly markets, especially during fast trading conditions.
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