OTC Options

AAA

DEFINITION of 'OTC Options'

Exotic options traded on the over-the-counter market, where participants can choose the characteristics of the options traded.

INVESTOPEDIA EXPLAINS 'OTC Options'

The flexibility of these options is attractive to many. With OTC options, both hedgers and speculators can benefit from avoiding the restrictions that normal standardized exchanges place on options. The flexibility allows participants to achieve their desired position more precisely and cost effectively.

RELATED TERMS
  1. CFLEX

    An electronic system for trading flex options, or options that ...
  2. Chicago Board Options Exchange ...

    Founded in 1973, the CBOE is an exchange that focuses on options ...
  3. Exotic Option

    An option that differs from common American or European options ...
  4. Expiration Date

    The last day that an options or futures contract is valid. When ...
  5. Vanilla Option

    A financial instrument that gives the holder the right, but not ...
  6. Options Clearing Corporation - ...

    An organization that acts as both the issuer and guarantor for ...
Related Articles
  1. Options & Futures

    Options Basics Tutorial

  2. Options & Futures

    Going Long On Calls

  3. Options & Futures

    Do Option Sellers Have a Trading Edge?

  4. Options & Futures

    Prices Plunging? Buy A Put!

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center