Simple English definitions for legal terms
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Term: CBOE
Definition: CBOE stands for Chicago Board Options Exchange. It is a place where people can buy and sell options, which are contracts that give the buyer the right to buy or sell something at a certain price in the future. It is located in Chicago, Illinois.
CBOE
CBOE stands for Chicago Board Options Exchange. It is a financial exchange where people can buy and sell options contracts.
For example, if you think the price of a stock is going to go up, you can buy a call option on that stock. This gives you the right to buy the stock at a certain price, called the strike price, at a later date. If the stock price goes up, you can exercise your option and buy the stock at the lower strike price, then sell it for a profit.
On the other hand, if you think the price of a stock is going to go down, you can buy a put option on that stock. This gives you the right to sell the stock at the strike price, even if the market price is lower. If the stock price does go down, you can exercise your option and sell the stock at the higher strike price, then buy it back at the lower market price for a profit.
The Chicago Board Options Exchange is a place where people can trade options contracts, which give them the right to buy or sell a stock at a certain price in the future. These contracts can be used to make money if the stock price goes up or down, depending on whether you buy a call or put option. The examples show how these options can be used to make a profit in different market conditions.