From a press release issued by CBOE Holdings...
CHICAGO, IL, Nov 01, 2010 (MARKETWIRE via COMTEX News Network) -- The Options Clearing Corporation (OCC) and CBOE Holdings, Inc. (NASDAQ: CBOE) announced today that C2 Options Exchange, Incorporated(SM) (C2(SM)) has become an OCC participant exchange. C2 began operations on Friday, October 29.
The addition of C2 as CBOE Holdings' new all-electronic options alternative now brings the total number of options markets in the U.S. to nine.
"We are excited to launch C2, our all-electronic alternative for options," CBOE Holdings, Inc. Chairman and CEO William J. Brodsky, said. "C2 emphasizes speed, simplicity, and a different and competitive fee schedule, and aims to attract an even broader customer base. As we grow this new venture, we look forward to continuing what has been an excellent working relationship with the OCC."
Wayne P. Luthringshausen, OCC Chairman and CEO, said, "We would like to extend a warm welcome to the newest options market, C2. As a participant exchange, C2 joins the eight other options markets to share in the benefits afforded through OCC's central counterparty clearing and settlement services."
OCC operates under the jurisdiction of the SEC and the Commodity Futures Trading Commission, and clears and guarantees the trades executed on all U.S. options exchanges. As a result of C2's affiliation with OCC, the standardized options contracts traded on C2 can be offset against the same options contracts traded on the other U.S. options markets, resulting in significant efficiencies for participating member firms.
About OCC OCC is the world's largest derivatives clearing organization by contract volume and open interest. Founded in 1973, OCC operates under the jurisdiction of both the Securities and Exchange Commission (SEC) as a Registered Clearing Agency and the Commodity Futures Trading Commission (CFTC) as a Derivatives Clearing Organization. OCC now provides central counterparty (CCP) clearing and settlement services to 15 exchanges and platforms for options, financial and commodity futures, security futures and securities lending transactions.
As the CCP clearinghouse for the markets it serves, OCC assumes the counterparty risk of members involved in a trade -- becoming the buyer to every seller and the seller to every buyer. OCC manages its risk of member default by collecting margin (collateral). Clearing member margin requirements are calculated using OCC's proprietary System for Theoretical Analysis and Numerical Simulations (STANS) that uses large-scale Monte Carlo simulations to forecast price moves and correlations to make those margin determinations. In 1993, OCC became the first clearinghouse to receive a 'AAA' credit rating from Standard & Poor's Corporation, and has continued to receive that high rating every year as a result of its risk management standards.
OCC operates as a utility clearinghouse, owned by several of its participant exchanges but with a Board of Directors majority drawn from its clearing members, allowing it to provide highly efficient but low-cost solutions to the markets it serves. More information about OCC is available through its Web site at www.optionsclearing.com.