Abstract
In this chapter, I will examine how exchange-traded options markets function. Initially, I will explain the role of the clearing house and the mechanics of margining at a typical futures and options exchange. Then, I will examine in detail the structure of four option markets that have different structures: the Philadelphia Stock Exchange, the European Options Exchange, the Option Market (Stockholm) and the Chicago Mercantile Exchange. At that point, I will finish the chapter with a discussion of a new kind of margining system that is based upon the risk analysis techniques presented in Chapter 9.
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