Boston Options Exchange - BOX

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  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. Toronto Stock Exchange - TSX

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

    A Canadian derivatives exchange that facilitates the trading ...
  5. Stock Option

    A privilege, sold by one party to another, that gives the buyer ...
  6. Price Improvement

    Attaining a higher bid price, if you are selling a stock, or ...
RELATED FAQS
  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. What does it mean to be long or short a derivative?

    A derivative is a type of security in which the price of the security is dependent on one or more underlying assets. A derivative ... Read Full Answer >>
  3. What is an over-the-counter derivative?

    A derivative is a type of security in which the price of the security depends on the price of the underlying asset. Depending ... Read Full Answer >>
  4. What does the underlying of a derivative refer to?

    A derivative security is a financial instrument in which the price of the derivative is dependent on its underlying asset. ... Read Full Answer >>
  5. What kinds of derivatives are types of contingent claims?

    A contingent claim is another term for a derivative with a payout that is dependent on the realization of some uncertain ... Read Full Answer >>
  6. What does it mean to take delivery of a derivative contract?

    When trading derivative contracts for options, a buyer or holder may have to take delivery of the underlying asset if the ... Read Full Answer >>
Related Articles
  1. Options & Futures

    An Alternative Covered Call Options Trading Strategy

    This different approach to the covered-call write offers less risk and greater potential profit.
  2. Options & Futures

    Options Trading Volume And Open Interest

    Learn how these two statistics can give you an edge in trading options.
  3. Options & Futures

    Synthetic Options Provide Real Advantages

    Participate in options trading trading that is simpler, less expensive and easier to manage.
  4. Retirement

    Electronic Trading Tutorial

    Learn about the systems that run the market. Topics include market makers, specialists, SuperDOT, ECNs, SOES, Level I, II, and III Access, and more.
  5. Options & Futures

    Option Volatility

    Knowing how the market works in relation to volatility can open a whole new world of opportunity.
  6. Forex

    Capital And Labor: Who Wins The Trans-Pacific Partnership?

    With President Obama securing fast track authority on the Trans-Pacific Partnership, the benefits for labor and capital can be examined.
  7. Professionals

    Understanding Series 6

    Upon successful completion of the Series 6, an individual will have the qualifications needed to sell open end mutual funds and variable annuities
  8. Mutual Funds & ETFs

    How To Invest In The Swiss Franc

    The Swiss franc is one of the safe havens of the investing world. Learn how invest through ETFs, forex, futures, and binary options.
  9. Investing

    What More Volatility Means For Momentum Stocks

    One byproduct of the recent tick higher in bond yields: a meaningful rise in volatility for both stocks and bonds.
  10. Options & Futures

    How & Why Interest Rates Affect Options

    The Fed is expected to change interest rates soon. We explain how a change in interest rates impacts option valuations.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center