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.

RELATED TERMS
  1. CFLEX

    An electronic system for trading flex options, or options that ...
  2. Option

    A financial derivative that represents a contract sold by one ...
  3. European Option

    An option that can only be exercised at the end of its life, ...
  4. OTC Options

    Exotic options traded on the over-the-counter market, where participants ...
  5. Pin Risk

    A risk that the writer of an options or futures contract faces ...
  6. Bermuda Option

    A type of exotic option that can be exercised only on predetermined ...
Related Articles
  1. Markets

    Customize Your Trading With Flex Options

    These unique instruments take options trading to a whole new level.
  2. Trading

    Exploring European Options

    The ability to exercise only on the expiration date is what sets these options apart.
  3. Trading

    Options Pricing: A Review Of Basic Terms

    The following is intended as a review of basic option terminology, which can be used as a reference as needed: American Options - An option that can be at any point during the life of the contract. ...
  4. Investing

    Getting Acquainted With Options Trading

    Learn more about stock options, including some basic terminology and the source of profits.
  5. Trading

    Give Yourself More Options With Weekly and Quarterly Options

    Weekly and quarterly options were introduced to give a greater choice of option expirations to investors, and enable them to trade more efficiently.
  6. Investing

    Income Strategies for Your Portfolio to Make Money Regularly

    Discover the option-writing strategies that can deliver consistent income, including the use of put options instead of limit orders, and maximizing premiums.
  7. Investing

    Types of Options

    There are many different types of options. In addition to general put options and call option, we will discuss 13 different types of options. Some of these option types are better suited to day ...
  8. Trading

    Three Ways to Profit Using Put Options

    A brief overview of how to profit from using put options in your portfolio.
  9. Trading

    Options Basics: What Are Options?

    An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date. An option, just like a stock ...
  10. Investing

    Exploring The World Of Exotic Options

    Exotic options provide investors with new alternatives to manage their portfolio risks and speculate on various market opportunities. The pricing for such instruments is considerably complex, ...
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?

    Learn how the strike prices for call and put options work, and understand how different types of options can be exercised ... Read Answer >>
  3. When holding an option through expiration date, are you automatically paid any profits, ...

    Holding an option through the expiration date without selling does not automatically guarantee you profits, but it might ... Read Answer >>
  4. 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 >>
  5. 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 Answer >>
  6. Why do option volume quotes differ on different websites?

    Option quotes are different in price and in volume because identical options can trade on more than one market or exchange. ... Read Answer >>
Hot Definitions
  1. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  2. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  3. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  4. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  5. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
  6. Security

    A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship ...
Trading Center