CHAPTER 5Fundamentals of Options Trading
In the early 1900s, a group of investment firms formed the Put and Call Brokers and Dealers Association. Through this association, an investor who wanted to buy an option could do so through a member who either would find a seller through other members or would sell (write) the option himself. This market was functional, but it lacked an adequate secondary market. In 1973, the Chicago Board of Trade formed the Chicago Board Options Exchange (CBOE). The CBOE was the first organized option exchange for the trading of options. Just as the CBT had served to increase the popularity of futures, the CBOE helped to increase the trading of options by making the contracts more marketable. Since the creation of ...
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