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EFTA01353440

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secondary market, flexibly structured options transac- tions are not suitable for investors who are not finan- cially able to bear the risks of maintaining such minimum positions in flexibly structured options. SPECIAL FEATURES OF FLEXIBLY STRUCTURED OPTIONS DESIGNATION OF TERMS----The parties to an open- ing transaction in flexibly structured options may des- ignate the option's variable terms in accordance with the rules of the options market where the transaction occurs. Included among the terms that an options market may identify as variable terms are the specifica- tion and amount of the underlying interest, whether the transaction involves a put, call or spread, the style of the option, the exercise price, the cap interval of a capped option, the expiration date. the method for determining the exercise settlement value of a cash. settled option that is exercised on the expiration date, the settlement currency of a cash-settled option, the premium currency, and the trading currency of a for- eign currency option. Only those terms identified as variable terms by the options market where the opening transaction occurs may be designated by the parties. All other terms are standardized in accordance with the rules of OCC and the options market. The rules of an options market may impose limitations on the variable terms which the parties may designate. For example, an options mar- ket may require that the expiration date of a flexibly structured option not fall within a specified period of time or that the life of the option not exceed a maxi- mum permissible term. As another example, if the exercise settlement value of an index option is based on a specified average, an options market may require that the average conform with the averaging parame- ters established by the market. In addition, the under- lying interest, the settlement currency, the premium currency and the trading currency, may be designated only from those available for f

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