Term of the Week – To Be Paid By the Buyer to the Seller

In addition to their potential intrinsic value, options also have another element of value: the option premium. The premium has to be paid by the buyer, which is then transferred to the option seller. To a certain extent, the purchase of an option contract can be compared to the acquisition of an insurance policy, where a premium is charged by the insurance seller. The insurance buyer pays the premium in advance of the period during which the insurance agreement is valid. The contract embeds a potential claim, which will only be lifted if certain conditions are met.

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John’s Take

Opinion: Class-Action Lawsuit Against CME Group Holds Disruptive Potential to Membership Prices, Future Deals and CME Leadership

Opinion: Class-Action Lawsuit Against CME Group Holds Disruptive Potential to Membership Prices, Future Deals and CME Leadership

A long-standing certified class-action lawsuit against CME Group, filed by members of the Chicago Board of Trade and Chicago Mercantile Exchange, poses a potential threat to the exchange group’s membership market. A mediated settlement, encouraged by the judge, could reshape how trading rights are offered at the exchange and potentially benefit a class of shareholders, whose B-shares have declined while A-share values rose.

Term Of The Week