Exchange Traded Options give you the right to buy or sell an underlying share at a particular price (the exercise price) on or before a specific date (the expiry date). When you exercise the option, you take up your right to buy or sell the share.
Exchange Traded Options offer you:
- the ability to hedge against a fall in a share price
- a speculative trading tool that gives you the potential to profit from your view about the future direction of a share
- the potential for greater returns than you might get from holding the underlying share (at a higher risk)
- a liquid investment because you can buy and sell them on the Australian Options Market
- the ability to buy or sell through an ASX Derivative Accredited broker
- the ability to generate income by short-selling or writing options against your existing shares or by constructing advanced options strategies.
Commonly used Strategies
- The Covered Call – click here for more info (PDF document, 252kb)
- The Bull Put Spread – click here for more info (PDF document, 256kb)
- The Bear Call Spread – click here for more info (PDF document, 256kb)
If you would like to speak to an accredited derivatives adviser please call New York Securities on (08) 9363 1700
This advice has been prepared by New York Securities Pty Ltd [ABN 70 111 049 800] and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. All potential investors should obtain a Product Disclosure Statement available from us relating to that financial product and consider that PDS before making any decision about whether to acquire that particular financial product. To acquire the product, you must complete the application form which accompanies the Product Disclosure Statement.