Supervising General Options Trading

The third Series 4 chapter moves from account-level review to the broader mechanics of options trading. The options principal has to understand how options orders are processed, how assignments and exercises are handled, what exceptions or prohibited trading patterns need review, and how trade errors and customer market access are controlled.

Read this chapter as the trading-operations layer. Start with normal trade flow and settlement, then move into exception review and error handling, and finish with market-access supervision.

In this section

• Order Flow, Exercise, Assignment, and Settlement
  Review the general operational process of options trading, including routing, exercise, assignment, and settlement, on Series 4.
• Exception Reviews and Prohibited Trading Activity
  Learn how Series 4 tests surveillance of large positions, order-marking issues, manipulative conduct, and other options-trading exceptions.
• Trade Errors and Market Access Controls
  Review how Series 4 handles options trade errors, cancel-rebills, obvious errors, and Rule 15c3-5 market-access controls.