CFLEX

CFLEX is an electronic trading platform for customized options, run by Cboe. It allows traders to trade options with customizable variables automatically electronically and anonymously instead of having to handle each trade by hand because of the unique terms of each option. It was started in 2007 by Cboe, formerly Chicago Board of Options.

CFLEX is operated by Cboe, formerly known as Chicago Board of Options, a division of the Chicago Board of Exchange. Cboe began in 1973 and was the first marketplace for traders and investors to trade derivative securities that were listed on the exchange. In 1993, Cboe created FLexible EXchange (FLEX) options, the ability to choose terms in an options trade. Before FLEX, all customized options trades had to be performed manually because they were all unique. 

Options are also called derivatives because they are derived from direct securities such as stocks and bonds. You buy or sell a direct security outright. Buying a derivative gives you the right, but not the obligation, to buy or sell a direct security at a certain time for a certain amount, and selling a derivative sells your right to do the same. Since derivatives have details that aren't as simple as the bid price and bid amount for stocks, or principal amount, interest amount and length of time for bonds, derivatives sales have more details that can be traded either as a standard set or customized.

Selling options with customized details required processing each sale manually, because it required finding a buyer, in some cases finding a seller, and matching all these custom details. When some options became listed on the exchange with standardized details, they were able to be traded electronically. However, technology and the imaginations of options traders didn't catch up with the possibility of using electronic trading to trade customized options until 2007. 

CFLEX allows traders to trade complicated options easily and simply through the internet. To trade through CFLEX, a trader needs to sign a user agreement with CFLEX and then begin trading using the internet-based platform either as a browser-based application or as an internet API. CFLEX offers traders the ability to trade anonymously in real time with a price-time matching algorithm and live order books. It also hosts a secondary market to change terms or cancel out an order with another order, a feature that serves the function of closing a position, but for options, which sometimes cannot technically be closed the way stocks can.