Flexible Exchange Option - FLEX

DEFINITION of 'Flexible Exchange Option - FLEX'

A non-standard option which can be customized, allowing both the writer and purchaser to define various terms. Flexible Exchange Options allow parties to negotiate the exercise style, strike price, expiration date and other features and benefits. They also give investors the opportunity to trade on a larger scale with expanded or eliminated position limits.

BREAKING DOWN 'Flexible Exchange Option - FLEX'

FLEX options do not trade in the continuous market. Instead, they are typically written by clearing houses. FLEX options were created in 1993 by the Chicago Board Options Exchange (CBOE) to target the over-the-counter (OTC) market of equity options and provide customers with more flexibility.

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RELATED FAQS
  1. Does the seller (the writer) of an option determine the details of the option contract?

    The quick answer is yes and no. It all depends on where the option is traded. An option contract is an agreement between ... Read Answer >>
  2. How do I change my strike price once the trade has been placed already?

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  3. Are there any risks involved in trading put options through a traditional broker?

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  4. When holding an option through expiration date, are you automatically paid any profits, ...

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  5. How are call options priced?

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  6. Do you have to be an expert investor to trade put options?

    Learn about investing in put options and the associated risks. Explore how options can provide risk, which is precisely defined ... Read Answer >>
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