Equity Derivatives Statistics

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The ASX Options trading game has just started today. The game can be found by going to http: The strategy from last week was all about generating income via selling CALL options over physical stocks that we hold — Covered call. Below was a real trade that successfully expired during the May options expiry on the 26th.

Please note that investors need to hold physical stock for more than 45 days to be eligible for franking credit over dividend payments. Please refer to this link for more information on franking credits. This options strategy involves both Call and Put options.

If the position is held till expiry the following scenario will materialise:. Scenario 1 Stock fell: The Put option will gain in value. You are able to either sell the Put option itself for a profit, or exercise your rights as the Option buyer and sell your shares at the Put strike price A.

Scenario 2 Stock rallied: The Sold Call option will be exercised at Point A. Remember as the seller of the Call option, you have committed to selling your shares at point A. In this scenario even though you did not gain on the options side of the trade, you are able to sell your shares at a higher price.

In most instances, the strategy will be closed early for a profit should the price of the underlying stock falls sharply. At initiation of the strategy, you will most likely receive a net credit, but you will have some additional margin requirements in your account because of the short call. You are able to lodge physical asx most traded options today against these positions to satisfy the margin requirements, instead of needing to come up with cash to cover.

Strike A Plus the net credit received or minus the net debit paid asx most traded options today establish the strategy. Potential profit is substantial if stock goes to Zero, but limited to strike price A plus the net credit received or minus the net debit paid to establish the strategy.

Margin requirement is the due to the Sold Call component. Stock will be lodged to cover these margins. Remember, you must own the underlying stock in order to Sell Calls!

Otherwise the position will be considered a Naked Call. Time decay — Neutral! Time decay will erode the value of the Put option you bought asx most traded options today but it will also erode the value of the Call option you sold which is good. Volatility will increase the value of the Call option you sold bad but it will also increase the value of the Put option you bought good.

In Australia, we established a down trend in the daily chart. We did not have any leads out of the US as markets were closed for Memorial day services on Monday. We are at the upper end of the trading range on the All Ords with trading asx most traded options today diminishing daily. Xiaoming has worked in the financial services industry for over 10 years as a private client adviser.

As a derivatives specialists Xiaoming is highly experienced in providing tailored bespoke equities and derivatives strategies for high net-worth domestic and international clients. Xiaoming graduated from the Royal Melbourne Institute of Technology with a bachelor of business majoring in Economics and finance. Asx most traded options today is an accredited level 1 and 2 derivatives adviser as well as licensed to provide financial advice to Superannuation funds and leveraged products.

She is also an active trader of her own account. Xiaoming Huang speaks on option strategies at many investment seminars and publishes weekly options strategies pieces covering equity, and index options for education purposes for the PhillipCapital Australia Website.

Professional, fully accredited and friendly advisors can help tailor the perfect solution to your needs. Established in Singapore inPhillipCapital operates across 16 countries, has over 1 million clients and manages over USD 28 billion assets under management and custody worldwide. You know your investments are safe with us. Expand your investment universe outside of Austraila and reach across the globe. PhillipCapital has access to exchanges across the world.

Tags options strategy options strategies options trading strategies option trading strategies options trading asx options trading game synthetic short stock covered calls.

Expert, Quality Advice Professional, fully accredited and friendly advisors can help tailor asx most traded options today perfect solution to your needs. Global Strength and Size Established in Singapore inPhillipCapital operates across asx most traded options today countries, has over 1 million clients and manages over USD 28 billion assets under management and custody worldwide.

Gateway to Americas, Asia and Europe Expand your investment universe outside of Austraila and reach across the asx most traded options today. Speak to an Advisor Request a Callback:

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Options give active investors the flexibility and ability to protect, grow or diversify their position. With a number of strategies and jargon, options can appear complex however all options strategies work on the same principle. You can write options against shares you already own to earn additional income.

As options are classed as either call or put options, you can generate wealth from rising and falling markets. Options can be used to offset potential falls in share prices by taking put options. This gives you the right to sell your shares at a pre-set price for the life of the option, no matter how low the share price may drop. Ever wondered how you can buy stock cheaper than the current share price?

In this article I will explain how you can increase returns than would have been achieved with a simple Options strategy while taking small profits along the way.

This is when an investor buys stock and sells Call Options. The Buy and Write is quite an unassuming strategy that has been used by institutional and retail investors over many years.

The stock is purchased and the Options are sold Calls , thereby this is an approach that suits a market that is steady or trending higher slightly. Writing a Put may mean an investor buys the stock at a predetermined price and time. Each option covers shares. These percentage advantages accumulate over time so that from the smallest investments, a bigger profit can grow.

So we can proceed to write another call. We no longer have a stock position in XYZ. Without the sale — all profits are unrealised. However, the option strategy has both enabled us to take small profits along the way and our profit is realised at the end of the strategy giving us capital to reinvest. The delta on an option is a member of a Greek family that determines the price of an option. The Delta is represented in mathematical terms between Options that are in the money have a delta of 1, options that are well out of the money have a lesser rating of say 0.

As the options moves closer to being in the money the delta will increase. So what does this mean? If the stock moves 1 cent, then so does the option. If the option has a delta of 0.

One important point needs to be made. As calls and puts are polar opposites this is reflected in the delta as well. Calls have positive deltas and puts have negative deltas. For example if the underlying rises the value of the call will increase, the put will decrease. So as you can see from the above examples can create more certainty around you fills for further details contact your broker or the ASX.

In current times the market has fallen 8 - 8. What if an investor could take advantage of a great dividend yield and the upward movements of a stock and remove any downside risk? Enter the Married Put strategy. It is used when the investor is bullish on the stock long term but is worried about short term uncertainty. We buy 1, XYZ Bank shares For every cent lost on the physical below the entry price, the equal and opposite gain would be made on the Put.

If the investor is still happy to keep the stock i. At this point the downside protection of the Put is removed. Or the put could be rolled e. There would be an additional cost here. At this point the investor may feel that the Put is no longer needed and it would lapse worthless.

Remember that if the investor is not comfortable with this strategy they can sell the stock and Put at any time to exit the position. Also there is a great variation to the Married Put which is the Leveraged Married Put where some Margin Lenders will lend the full value of the stock if the Put is in place.

The Married Put is a simple and effective strategy that gives investors the ability to stay in the market through times of short-term uncertainty. If anything, it gives the investor some time to make a measured decision at a cost that is far outweighed by the profit potential.

In the event that an incorrect decision is made, the cost of that is limited to the cost of the option. Historically the market spends more time moving in an upward direction bull market , than in a downward trend bear market. That's good news for investors, as over time the bull market will win out in duration and the longer you hold your Blue-chip portfolio the greater the chance of positive returns. On the flip side, the longer you hold your Blue-chip portfolio, the greater the chances are that you will encounter a correction.

In my opinion the below are representative:. We insure our house. We insure our car. Some people even insure their pets Like all other options, they have Calls and Puts, they can be bought and sold prior expiry, they have an expiry date and a strike. They are cash settled on expiry, which is when profit or loss is actually realised. The settlement Price expiry is the opening price of the index on the day of expiry.

Like with most options, if the investor believed the underlying asset was to fall they would look buy a Put to cover it. The XJO protection directly mirrors the fall in the market in this example because we have purchased the option at the strike that is exactly the same as the index level.

The same calculation can be used for any percentage correction in this example. Not many investors would have all stocks in their physical portfolio, or even ONLY blue-chip stocks. In the event of a correction your physical portfolio could fall more or less than the cover provided by the options you hold.

In the event that no correction occurs during the life of the Put cover, then the premium paid would be lost as the option expires worthless if the index is above at expiry. In order to continue cover, another Put position would need to be purchased which would involve recurring outlays to afford protection. Over time this could become costly. Investors could use the dividends received on an annual basis to help fund the use of protections strategies like this. In summation, options give you options.

You may not have to liquidate your portfolio with the rest of the herd at a great loss. Options trading What is an mFund? Learn forex trading What is forex? Benefits of trading forex? Trading guides What is options trading? Is there any support on the platform?

How do I fund my account? How can I reset my password? Where can I find my account number? How do I do a one-off sale? How do I pay for my shares?

What is your brokerage? Can I trade my margin loan with you? Contact us Premium Services. What is options trading? Options trading Options give active investors the flexibility and ability to protect, grow or diversify their position.

Options can be used to: Earn income from your share portfolio You can write options against shares you already own to earn additional income. Generate wealth in rising and falling markets As options are classed as either call or put options, you can generate wealth from rising and falling markets. Hedge against share price falls Options can be used to offset potential falls in share prices by taking put options.

Working examples and case studies Case study 1: From little things, big things grow Ever wondered how you can buy stock cheaper than the current share price? Open a Stockbroking account.