Boston Options Exchange - BOX


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.

  1. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee ...
  2. Options Industry Council - OIC

    A cooperative formed in 1992 by U.S. options exchanges and Options ...
  3. Stock Option

    A privilege, sold by one party to another, that gives the buyer ...
  4. Toronto Stock Exchange - TSX

    The largest stock exchange in Canada. The Toronto Stock Exchange ...
  5. Montreal Exchange

    A Canadian derivatives exchange that facilitates the trading ...
  6. Price Improvement

    Attaining a higher bid price, if you are selling a stock, or ...
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  1. How can I find out which stocks also trade as options?

    The trading of options has become increasingly popular among retail investors as they become aware of the many different ... Read Full Answer >>
  2. How do hedge funds use equity options?

    With the growth in the size and number of hedge funds over the past decade, the interest in how these funds go about generating ... Read Full Answer >>
  3. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>
  4. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. 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 >>
  6. 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 >>

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