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the difference between a determined value of the un- derlying interest at the time the option is exercised and the fixed exercise price of the option. A cash-settled call conveys the right to receive a cash payment if the determined value of the underlying interest at exer- cise—this value is known as the exercise settlement value—exceeds the exercise price of the option, and a cash-settled pg conveys the right to receive a cash payment if the exercise settlement value is less than the exercise price of the option. Each options market selects the underlying interests on which options are traded on that market. Options are currently available covering four types of underly- ing interests: eguitnecurities, stock indexes. govern- ment debt securities. and foreign currencies. Options on other types of underlying interests may become available in the future. Most options have standardized terms—such as the nature and amount of the underlying interest. the expi- ration date, the exercise price, whether the option is a call or a put, whether the option is a physical delivery option or a cash-settled option, the manner in which the cash payment and the exercise settlement value of a cash-settled option are determined, the multiplier of a cash-settled option, the style of the option, whether the option has automatic exercise provisions, and ad- justment provisions. These standardized terms are generally described in Chapter II. Each U.S. options market publishes specification sheets setting forth the particular standardized terms of the options traded on that options market. (The options markets may also provide for trading in options whose terms are not all fixed in advance. Rather, subject to certain limitations, the parties to transactions in these options may desig- nate certain of the terms. These flexibly structured op- tions are discussed in Chapter VII of this booklet.) Options having the same standardized terms are identical and comprise

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