Derivatives: introduction to options: trading of options
The majority of equity related options take the form of traded options that are written, issued and traded on investment exchanges (STSM120000), which allow members to trade in a wide range of financial derivatives including equity options.
Over The Counter equity option contracts are generally not traded on an investment exchange, but undertaken privately between two separate and independent parties with any exercise and subsequent settlement of the option undertaken outside of the exchange system.
See STSM112050 for the meaning of option exercise
See STSM112100 for further information on Over The Counter options