Counterparty risk equity options

Posted: Russtar Date: 12.07.2017

Shweser mock says although a forward conversion with options avoids counterparty risk, the equity forward sale and the total return equity swap use a derivatives dealer and thus include counterparty risk. How does a forward conversion with options not have counterparty risk? It is equivalent to a forward but uses options. Options are exchange traded and have a clearinghouse which eliminates counterparts risk.

How do you know if the options are OTC or exchange traded? I thought puts and calls were all OTC but clearly not.

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Options and counterparty risk | AnalystForum

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counterparty risk equity options

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Do Options Carry Counterparty Risk? | Stock Options Channel

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