Description: Options Trading, Options History,
CBOT, CBOE, Trading, Exchange, S&P 500, DJI, S&P 100
Options are contracts between two parties in which one party
has the right and the other party has the obligation to buy or sell a specified
amount of assets at a specified price. Basically the options allow to secure the
future price of the assets.
It is difficult to say when the options started to trade first, however, from
the history we mention that Romans and Phoenicians used similar contracts in
shipping. The history also mention Thales - the mathematician and philosopher in
ancient Greece - who secured the future price of the oil and later when the
olive price went up, sold them at higher price.
In Europe the options started to attract tulip dealers in early 1600s who wanted
to secure the reasonable price in the future. However, very
soon the options started to attract speculators.
In North America the options appeared in early 19th century, basically at the
same time when stocks started to trade. However at that time options were not
traded on the Exchanges and it was up to an options buyer to find an options
seller. In majority cases it was done through newspaper advertising.
1848 is considered an official year when options started to trade. On this year
Thomas Dyer opened Chicago Board of Trade (CBOT) and became the first precedent
CBOT. Later the Kansas City Board of Trade, the Minneapolis Grain Exchange, and
the New York Cotton Exchange started to trade.
In 1934 (after the big depression) the options trading lay under the supervision
of Securities and Exchange Commission (SEC).
At that time options trading was not very popular and by 1968 the annual trading
options volume still did not exceeded 300K contracts.
The big jump in options trading comes to 1968 the year when the Chicago Board
Options Exchange (CBOE) was opened for options trading. It was the first U.S.
options exchange. On April 26, 1968 - first day of trading on CBOE - only 911
options contracts were traded, yet, in a few years, in early 70's the daily
volume already exceeded 200,000 contracts by the end of 1974. One of the reasons
of such volume growth was new laws that gave right to banks and insurance
companies to include options in their portfolios.
Staring from 1975 the other exchanges started to trade listed options: the
American Stock Exchange (AMEX), the Pacific Stock Exchange (PSE) and the
Philadelphia Stock Exchange (PHE).
Another important stem that attracted new investors into options trading was in
1977 when put options started to trade - by that time only call options were
traded on the market. The put options were issued only on 5 stocks.
The puts were enthusiastically accepted by traders and already in 1979 the
annual options traded volume hit 35.4 million contracts.
The big interest in options pushed Exchanges to start trading options on indexes
and in 1983 the first options on the indexes were launched by CBOE. On March 11,
1983 - S&P 100 (OEX) option and on July 1 1983 - the
S&P 500 Index (SPX) options
trading were launched. Later in 1997 the DJX options were added to the list of
In 1985 the NASDAQ Stock Exchange and NYSE (New York Stock Exchange) started to
list the equity options.
The interest in options trading was growing and in 1999 alone, the CBOE doubled.
Almost 60 million open options contracts were by the end of 1999.
A trader interested in options could find a various number of offered options -
equities options, index options, currency options, futures options. The great
leverage and liquidity, growing number of online options brokerage companies and
trading platforms attracts more and more investors.
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for informational and educational purposes and not as a solicitation to make
an investment. Therefore you should not make any decisions based on our
signals, our trading system or any other information on this site.
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responsibility. None of our web site materials should be interpreted as a
recommendation or solicitation to buy or sell any security, or to take any
specific action. Any trades executed following the commentaries and Buy/Sell
signals on this web site are taken at your own risk from your own account.
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financial, emotional or otherwise, experienced, suffered or incurred by you.