1.2.4.1.7 Options
Because options pose risks that other securities do not, customers who trade in options must be given a special disclosure document about options. Specifically, broker-dealers must give customers a copy of the options disclosure document (ODD) at or prior to the time the customer’s account is approved for trading options. The ODD is prepared and issued by the Options Clearing Corporation (OCC), which is the clearinghouse for options transactions. The ODD describes the mechanics of buying, selling, and exercising options. The document also describes what options are used for, their risks, and their costs.
Any amended versions of the ODD must be given to customers by the time that the customer confirmation is sent.
Customers approved for writing uncovered options must receive an