Explaining the Options Price Reporting Authority (OPRA)
The Options Price Reporting Authority (OPRA) is a pivotal guardian in the financial realm, comprising representatives from the top-tier securities exchanges. OPRA’s mission? To gather and disseminate essential last-sale options quotations and crucial data from participating exchanges, creating a transparent and efficient national market system.
Key Takeaways
- Crucial Market Data Provider: The Options Price Reporting Authority (OPRA) expertly aggregates and issues price quotations for listed options contracts in the United States.
- Comprehensive Data Feeds: OPRA’s data pipelines cater to a wide range of financial entities, providing the national best bid and offer (NBBO) for options contracts or series.
- The Backbone of Options Trading: Options quotes, structured in tabular formats known as options chains, deliver critical information helpful for making informed trading decisions.
How OPRA Innovates Market Transparency and Efficiency
Facilitating Unified Market Communication
OPRA delineates its responsibilities into two principal domains: a general service for all options barring foreign currency derivatives and an exclusive service for foreign currency options. Partnering platforms include Boston Options Exchange (BOX), Cboe Options Exchange, International Securities Exchange (ISE), Philadelphia Stock Exchange (PHLX), Miami International Securities Exchange, NYSE Arca, NYSE American, and Nasdaq BX Options.
These quotes pooled from disparate exchanges are measured against OPRA’s consolidated feed to present an NBBO quote. The authority collaboratively ensures the expedient release of reliable market data encompassing the intricate world of listed options.
Enhancing Market Liquidity and Efficiency
With layers of sophisticated information courtesy of OPRA, market liquidity and efficiency gain solid traction. Analytics provided by OPRA aids in lowering informational disparities in capital markets, thereby driving a more developed and cost-effective arena for savers and borrowers alike.
Deciphering Options Quotes Like a Pro
Options trading comes with its set of complexities, and initially, it may read like an unfamiliar tongue. However, immersing yourself in options quotes empowers an enriching view of potential and risks in security investments.
Here’s an example of an options chain using Apple Inc. as a reference. The left column showcases the option tickers, where each listing represents call options with distinct strike prices expiring in August 2019. Specifications such as last trade time, bid, ask prices, and volume—alongside the last price’s implied volatility—paint a comprehensive picture for that option.
1| Ticker | Strike Price | Expiration | Last Trade Time | Bid | Ask | Last Price | Change | Volume | Implied Volatility |
2|--------|--------------|------------|-----------------|-----|-----|------------|--------|--------|---------------------|
3| AAPL_C_200 | 200 | Aug 2019 | 15:30 | 4.00 | 4.10 | 4.05 | +0.10 | 1200 | 22% |
In conclusion, the Options Price Reporting Authority (OPRA) serves as the intricate mechanism driving efficacy and transparency within the options trading domain. Whether you’re a financial firm, broker, or independent trader, mastering OPRA insights can elevate your grasp on market dynamics and optimize your trading strategies.
Related Terms: options chain, market liquidity, national best bid and offer, strike price, implied volatility.
