General Securities Representative (Series 7) Practice Exam

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Where do the majority of index options trade?

NYSE
NASDAQ
CBOE
AMEX

The correct answer is: CBOE

The majority of index options trade on the Chicago Board Options Exchange (CBOE). The CBOE is particularly well-known for being the first exchange to list options on stock market indices, and it has established itself as a leading marketplace for trading options based on various indices, including the S&P 500 and the Nasdaq-100. The CBOE provides a platform specialized for options trading, offering a range of products that cater specifically to investors looking to hedge or speculate on index movements. The exchange's advanced electronic trading systems and liquidity make it the preferred venue for index option transactions. In contrast, while other exchanges like NYSE, NASDAQ, and AMEX also facilitate options trading, they do not specialize in index options to the same extent as the CBOE. Each of those exchanges may focus more on equity options or other products, but the volume and variety of index options available at the CBOE set it apart as the primary venue for such instruments.