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.