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.
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RELATED FAQS
  1. 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 >>
  2. 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 >>
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    Although the participant may be eligible to withdraw the funds if a plan is terminated as a result of an acquisition or other ... Read Answer >>
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