The Securities and Exchange Commission approved a rule change proposed by the Options Clearing Corporation (OCC) to enhance its risk management systems. This decision aims to better capture risks associated with short-dated options, which have become more prevalent in financial markets. The changes involve aligning model assumptions and developing tailored volatility estimates for options with a short expiration period. Such improvements are intended to help OCC manage financial risks more effectively and ensure the protection of securities and funds in its care.
Simple Explanation
The SEC gave a thumbs-up to changes that help a group called OCC be better at figuring out risks with really short-term stock market bets, so they can keep money safe. This helps them stay on top of things when lots of quick trades happen.