Over-the-Counter Options

Normally, if an investor wants to trade or speculate in options, he or she will peruse the options tables in the newspaper or on their broker’s website. The various puts and calls for a given security will be shown for different expiration dates, going out as far as a couple of years in the case of LEAPs.

The only problem with listed exchange-traded options is that a suitable derivative for an investment strategy you’ve developed may not exist in standardized form. For the well-heeled investor, this presents no problem because he or she can work with an investment bank through their wealth manager to structure custom over-the-counter options tailored to their exact needs.

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