Answer :

A customer should receive a current options disclosure document before or at the date of account approval.

An essential resource for options traders is the options disclosure document (ODD), a document released by the Options Clearing Corporation (OCC). For new options traders, the detailed document, officially titled Characteristics and Risks of Standardized Options, is especially important.

Options are financial derivatives whose value is derived from the value of underlying equities like stocks. Investors who purchase options have the option, but not the duty, to buy or sell the underlying asset at the predetermined price and within the predetermined time frame.

The ODD handbook offers helpful examples illuminating various trading circumstances as well as definitions for the most popular words used in options trading.

The dangers of trading options are generally disclosed. Brokers and brokerage companies are required by the Securities Exchange Act and the Financial Industry Regulatory Authority (FINRA) to provide consumers with the options disclosure document and any supplements.

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