Chicago Board Options ExchangeCBOE) is the site where options are traded and cleared. Located in Chicago, the exchange is an interesting one, and its web site offers an array of tools and features specifically aimed at options traders.
From the home page, link to "trading tools" and then to "virtual trading tool." One of the most interesting features of the free CBOE paper-trading page is that it asks you to set up your own trading level. It sets this based on your experience, interests, and skill levels.
You can also set up the dollar amount of your portfolio from $5,000 and up. You should establish your account to start out at the level you are likely to start in a real trading account, so that your paper-trading experience will take place in an environment similar to the one you'll experience later on, using actual cash.
The CBOE also offers extensive and easy-to-use options quotes. If you do not yet have a brokerage account, this feature is very valuable. Many financial web sites offering free quotes are limited to stocks and are not set up for ease of use in options trading. The CBOE is an exception. Its options listings are accessible by linking to "quotes" and then to "delayed option chains." The delayed chain link is practical for most people. It lists all calls and puts on a specified stock on a single page. This feature is valuable because you don't need to know the symbol for an option in advance, a problem many options traders have to struggle with. Quote symbols used to be simple, but after the introduction of long-term equity anticipation security (LEAPS) options, they became quite complex. So the CBOE system is just as convenient as most brokerage listing systems.
By Michael C. Thomsett