Privilege Dealer

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DEFINITION of 'Privilege Dealer '

An individual or a securities firm that is registered as a market maker or specialist in listed options. A privilege dealer trades futures or options with their gains and losses being subject to a complex set of rules.


Also known as an options dealer.

BREAKING DOWN 'Privilege Dealer '

An options dealer can also be a dealer in regular securities like stocks, bonds, notes, mortgages, bills of lading and bills of exchange. They are subject to the same treatment as a securities dealer with respect to transactions.

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RELATED FAQS
  1. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
  2. How does a forward contract differ from a call option?

    Forward contracts and call options are different financial instruments that allow two parties to purchase or sell assets ... Read Full Answer >>
  3. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
  4. What does a futures contract cost?

    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
  5. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>
  6. How can an investor profit from a fall in the utilities sector?

    The utilities sector exhibits a high degree of stability compared to the broader market. This makes it best-suited for buy-and-hold ... Read Full Answer >>

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