FLexible EXchange� Options, or FLEX� Options, were introduced by CBOE in 1993. They were designed to give institutional investors greater access to customized derivatives. FLEX� options provide customization features similar to over-the-counter (OTC) options but with the convenience and guarantee of exchange-traded options.

Similar to OTC options, FLEX� options allow contractual terms such as expiration date, exercise price, style and contract size to be individually specified.

Unlike OTC options, FLEX� options are traded through the exchange, with the Options Clearing Corporation (OCC) being the issuer and guarantor of all FLEX� option contracts. As the OCC is the largest derivatives clearing organization in the world as well as the first to be awarded a "AAA" credit rating from Standard & Poor, the trading of FLEX� options is considered to be virtually free of counterparty risk.

Index FLEX� Options

The first types of FLEX� options to be introduced were FLEX� option contracts on stock market indices and hence they are often simply referred to as FLEX� options. Index FLEX� options are available on all CBOE listed indices, including the following major indices:

Equity FLEX� Options

Following the success of Index FLEX options, CBOE launched FLEX� options on individual equities in 1995 and they were known as E-FLEX� options. E-FLEX� options are available on a wide range of actively traded underlying stocks and they include most option classes that are listed at CBOE.