|
The Founders
previous page |
next page ![](../images/arrow.gif)
|
The concept of a third market for equity
securities cannot be translated readily to a third market for
options. Equity securities are created and originally issued by
companies to raise capital. In contrast, stock options are not
created by the company. Rather, when someone buys an option on
an exchange, he or she actually initiates the creation of a new
options contract. Equity options contracts traded on a national
securities exchange are issued and guaranteed by The Options Clearing
Corporation ("OCC"). These options are called "standardized" options
and are fungible (options purchased on one options exchange can
be sold on a different options exchange). That is what differentiates
OCC issued options from any other contract between two parties
and what facilitates exchange trading of options. Since OCC will
only issue and guarantee options contracts if they are traded
on a registered market, such as an exchange, Porter and Averbuch
decided to create a registered exchange that would be a member-owner
of OCC.
|