One key difference between swaps and option contracts is:
A)Swaps are derivative agreements and options are not.
B)Swaps do not involve any risk and options do.
C)Options transfer risk, swaps create risk.
D)Options trade on organized exchanges and swaps do not.

Question

Quizplus · Accepted Answer

Options trade on organized exchanges such as the Chicago Board Options Exchange (CBOE) and the International Securities Exchange (ISE), while swaps are traded over-the-counter (OTC) and are not organized. Therefore, D is the correct answer. A, B, and C are all incorrect statements.

One Key Difference Between Swaps and Option Contracts Is