Approved Participants

DEFINITION of 'Approved Participants'

Institutional investors who are allowed direct access to an exchange's trading environment. Approved participant status usually affords trade execution cost savings and the right to install trading terminals in client offices.

BREAKING DOWN 'Approved Participants'

Eligibility of approved participants is determined by specific criteria outlined by the respective exchange. For example, the Boston Options Exchange requires a potential approved participant to be a U.S.-based entity, a member of a designated options examining authority and have a minimum $200,000 in net equity.



Approved participants are able to take part in prearranged transactions (trades where the two parties agree on the transaction's terms prior to placing orders in the electronic trading system) such as block trades.
RELATED TERMS
  1. Eligible Contract Participant

    A group or individual allowed to engage in financial transactions ...
  2. Negative Authorization

    A credit card approval system that compares a credit card number ...
  3. With Approved Credit - WAC

    A condition requiring a purchaser using financing to have adequate ...
  4. Participation Rate

    A measure of the active portion of an economy's labor force. ...
  5. Reprice

    A situation involving the exchange of stock options that are ...
  6. Approval Response

    An approval code sent to a point of sale terminal that verifies ...
Related Articles
  1. Markets

    Explaining the Participation Rate

    The participation rate is the percentage of civilians who are either employed or unemployed and looking for a job.
  2. Trading

    Forex Market Basics

    The foreign exchange market is a market where participants buy, sell, and exchange trillions of dollars worth of currencies daily. Learn the basics of the FX market.
  3. Managing Wealth

    Asset Manager Ethics: Placing and Managing Trades

    Five guidelines have been created to assist asset managers on the best practices for placing and managing trades in client accounts.
  4. Retirement

    401(k) Rollovers: The Tax Implications

    The tax rules for 401(k) rollovers can be simple or more complex, depending on which path you take.
  5. Investing

    What's an Exchange?

    An exchange is an organized marketplace where securities and other financial instruments are traded.
  6. Trading

    The Currency Market Information Edge

    Unique features of the forex market may allow larger players to get a jump on smaller ones.
  7. Investing

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on and find out!
  8. Trading

    What is the Difference Between Institutional Traders and Retail Traders?

    The differences between retail and institutional traders lie in the size of the trade, level of sophistication, and the speed of transactions.
  9. ETFs & Mutual Funds

    A Detailed Look Into China's Options Market

    As the Chinese options market gradually takes shape, we provide an overview, including details of the initial phase and building blocks, primary beneficiaries, the impact on the overall financial ...
  10. Markets

    Trading Over the Counter

    OTC trades tend to be for smaller company stocks and debt securities. Debt securities such as bonds are generally traded by investment banks making markets for specific issues.
RELATED FAQS
  1. When a broker-dealer has decided to provide its registered representatives with ...

    The correct answer is A) All sales literature, specifically including reprints, must be approved by a principal of the firm ... Read Answer >>
  2. Where can I purchase options?

    In the United States, all options contracts go through one of several options exchanges. An investor must have an account ... Read Answer >>
  3. What are my main rights as a 401(k) plan participant?

    Learn how under ERISA, 401(k) plan participants are guaranteed several important rights, including protections of their plan ... Read Answer >>
  4. Is a Canadian resident allowed to participate in a direct stock purchase plan from ...

    There is no law that prevents Canadians from participating in direct stock purchase plans offered by U.S. companies. There ... Read Answer >>
  5. How are new exchange traded funds (ETFs) created?

    Read about how exchange-traded funds are proposed to the SEC, created with underlying assets, sold to authorized participants ... Read Answer >>
  6. Is a person an active participant in an employer-sponsored retirement plan if he ...

    Yes. An individual is considered an active participant even if his or her participation in the plan has been for only a short ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center