Boston Options Exchange - BOX

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DEFINITION of 'Boston Options Exchange - BOX'

An all-electronic equity derivatives exchange launched on February 6, 2004, as a joint effort by the Montreal Exchange, Boston Stock Exchange and Interactive Brokers Group to provide an alternative to existing options markets. Technical operations of the Boston Options Exchange (BOX) are handled by the Montreal Exchange.

BREAKING DOWN 'Boston Options Exchange - BOX'

The BOX was the first options exchange to offer price improvement to traders through a process called PIP, which stands for Price Improvement Period. Although all investors can be "PIPed," the investor must have a broker that is willing and able to offer a facilitation trade – a trade where the broker guarantees the first penny of price improvement. Because not all brokers offer this to their clients, some investors do not have access to the price improvement offered on the BOX.

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RELATED FAQS
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    The trading of options has become increasingly popular among retail investors as they become aware of the many different ... Read Full Answer >>
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  3. How does a forward contract differ from a call option?

    Forward contracts and call options are different financial instruments that allow two parties to purchase or sell assets ... Read Full Answer >>
  4. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>
  5. How can an investor profit from a fall in the utilities sector?

    The utilities sector exhibits a high degree of stability compared to the broader market. This makes it best-suited for buy-and-hold ... Read Full Answer >>
  6. What is the difference between derivatives and options?

    Options are one category of derivatives. Other types of derivatives include futures contracts, swaps and forward contracts. ... Read Full Answer >>

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