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The purpose of this booklet is to provide an intro-ductory understanding of index options and howthey can be used. Index options are currently tradedon the following U.S. exchanges: The AmericanStock Exchange LLC (AMEX), the Chicago BoardOptions Exchange, Inc. (CBOE), the InternationalSecurities Exchange (ISE), the Pacific Exchange,Inc. (PCX) and the Philadelphia Stock Exchange,Inc. (PHLX). Like trading in stocks, options trad-ing is regulated by the Securities and ExchangeCommission (SEC). These exchanges seek to provide competitive, liquid and orderly markets for the purchase and saleof standardized options. All option contracts tradedon U.S. securities exchanges are issued, guaranteedand cleared by The Options Clearing Corporation(OCC). OCC is a registered clearing corporationwith the SEC and has received a ‘AAA’ rating fromStandard & Poor’s Corporation. The ‘AAA’ ratingrelates to OCC’s ability to fulfill its obligations ascounterparty for options trades.