Q: Given two identical stock index options...

...one offered by exchanges (ie. the listed market) and one by dealers in the OTC market. Are investors indifferent to the choice of these two options?

A: In the listed markets, the investors get the clearinghouse guarantee. In the dealer markets, they have to rely on the dealer's credit reputation.

It is also much easier to get the options customized in the dealer markets than it is in the listed markets.

Category: C++ Quant > Derivative

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