Listed Option

DEFINITION of 'Listed Option'

An option that is sold on a registered exchange, such as the Chicago Board Options Exchange (CBOE) or Euronext. Listed options cover securities such as common stocks, ETFs, market indexes and commodities. All listed options have stated exercise prices and expiration dates.

Also known as "exchange-traded options".

BREAKING DOWN 'Listed Option'

There are many options contracts that are sold OTC in very illiquid market situations, but such trading is usually limited to the buyers and sellers, and the terms tend to be more variable.

There are two types of listed options: American style and European style. The main difference between the two is that American style options can be exercised at any time up to the expiration date, while European style options have a smaller window in which they must be exercised. Most options found on the national exchanges are American style options.

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RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. 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 >>
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    The trading of options has become increasingly popular among retail investors as they become aware of the many different ... Read Answer >>
  5. How can derivatives be used to earn income?

    Learn how option selling strategies can be used to collect premium amounts as income, and understand how selling covered ... Read Answer >>
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    The use of options has increased dramatically over the years as a way to profit from or hedge against the volatile movements ... Read Answer >>
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