Each options market selects the underlying interests on which options are traded on that market. Options on other types of underlying interests may become available in the future. 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. Rather, subject to certain limitations, the parties to transactions in these options may designate certain of the terms.
Options having the same standardized terms are identical and comprise an options series.
The standardization of terms makes it more likely that there will be a secondary market in which holders and writers of options can close out their positions by offsetting sales and purchases. By selling an option of the same series as the one he bought, or buying an option of the same series as the one he wrote, an investor can close out his position in that option at any time there is a functioning secondary options market in options of that series.