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Letter on Listed Options Transactions

OCC submitted this letter on behalf of the U.S Securities Markets Coalition to the staff of the Federal Reserve Board (FRB) as a follow up to a meeting with the FRB staff on the impact of the risk weighted capital rules on the listed options market. In the letter, we provide details regarding typical trading practices in the listed options market. This information relates to our observation, discussed at the meeting, that the risk weighted capital rules may be particularly ill-suited when applied to the risk-limited trading strategies that characterize the listed options market. We then offer further thoughts in the letter regarding the potential for interpretive relief.

This web site discusses exchange-traded options issued by The Options Clearing Corporation. No statement in this web site is to be construed as an endorsement, recommendation or solicitation to purchase or sell a security, or to provide investment advice. Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of the disclosure document, Characteristics and Risks of Standardized Options. Individuals should not enter into option transactions until they have read and understood this document. To obtain copies, contact your broker, any exchange on which options are traded, or The Options Clearing Corporation, 125 S. Franklin Street, Suite 1200, Chicago, IL 60606 (investorservices@theocc.com).