Options,premium contracts,and the EOE

Summary The article examines the development of options trading in Amsterdam from the seventeenth century to the present time. It shows how the market for traditional options, or premium contracts, was restricted by a number of limitations and how a new form of option — the exchange traded option, and a new options market — the European Options Exchange (E.O.E.), were introduced to overcome these limitations. It examines the first two years of operation of the E.O.E., analyzes some of the problems faced by the E.O.E., and looks at the future development of this new market.