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. Listed Option

    An option that is sold on a registered exchange, such as the ...
  2. CFLEX

    An electronic system for trading flex options, or options that ...
  3. Mid-Atlantic Option

    An option that can be exercised at different times during the ...
  4. Option

    A financial derivative that represents a contract sold by one ...
  5. OTC Options

    Exotic options traded on the over-the-counter market, where participants ...
  6. American Option

    An option that can be exercised anytime during its life. American ...
Related Articles
  1. Options & Futures

    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. ...
  2. Options & Futures

    Getting Acquainted With Options Trading

    Learn more about stock options, including some basic terminology and the source of profits.
  3. Options & Futures

    Three Ways to Profit Using Put Options

    A brief overview of how to profit from using put options in your portfolio.
  4. Options & Futures

    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 ...
  5. Options & Futures

    Getting Started In Forex Options

    Stocks are not the only securities underlying options. Learn how to use FOREX options for profit and hedging.
  6. Options & Futures

    Introduction - Day Trading and Options

    Options have not been a tradition part of day-trading strategy, but this is quickly changing.
  7. Stock Analysis

    How To Read An Options Table

    With more information available and the ability to quickly trade options online, investors are becoming savvier with using options to speculate, hedge and create their own financial strategies ...
  8. Options & Futures

    A Newbie's Guide To Reading An Options Chain

    Learning to understand the language of options chains will help you become a more informed trader.
  9. Options & Futures

    Options Pricing

    Options are valued in a variety of different ways. Learn about how options are priced with this tutorial.
  10. Options & Futures

    4 Reasons To Hold Onto An Option

    There are times when an investor shouldn't exercise an option. Find out when to hold and when to fold.
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 are call options priced?

    Learn how aspects of an underlying security such as stock price and potential for fluctuations in that price, affect the ... Read Answer >>
  3. 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 >>
  4. Do options make more sense during bull or bear markets?

    Understand how options may be used in both bullish and bearish markets, and learn the basics of options pricing and certain ... Read Answer >>
  5. What's the difference between a regular option and an exotic option?

    Before learning about exotic options, you should have a fairly good understanding of regular options. Both types of options ... Read Answer >>
  6. Can an option have a negative strike price?

    The simple answer is that, at least when it comes to exchange traded options, an option can't have a negative strike price ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center