Question regarding Exchange Traded Options - Aussie Stock Forums

Results 1 to 9 of 9
  1. #1

    Default Question regarding Exchange Traded Options

    I am currently looking for a new online broker, Etrade costs far to much.

    When I have been comparing the brokers one of the things I don't quite understand is with regard to Exchange Traded Options. When they say Options are not included, does that mean I cannot create my own options?

    I just want to trade already existing options, will I still be able to do this?



  2. #2

    Default Re: Question regarding Exchange Traded Options

    Hi Rhys,

    Not sure what they are referring to. I can't see why a broker wouldn't give you access to an already listed option series. Most brokers quote option fees as excluding ACH fee (Australian clearing house) which is like $1.20 or something per contract

    If it is a question of trying to obtain an unlisted strike price on a particular stock you usually can, just need a large enough volume... call your broker and the ASX / market makers should be able to list the series

  3. #3

    Question Exchange Traded Options question

    Hi all,

    I've been trading shares for 5 years or so and would like to try out ASX options (ETOs). Is it very likely that I won't be able to sell on my options to take profits/losses reasonably quickly? It just seems that way to me as the volume for most of MQG's calls, for example, can be as low as < 50 or none at all. Should I then plan on having to exercise my options and selling them on the share market, even if it means more brokerage costs? And how long would this process take, from exercise to having the shares on hand to sell?

    I know other options markets are more liquid, but I prefer to stay in AUS for now.

    Thanks for any help.

  4. #4

    Default Re: Exchanged Traded Options question

    There should be a Market Maker willing to buy those options off you.

  5. #5

    Default Re: Exchanged Traded Options question

    Sorry for my lack of knowledge, but if market makers are there, wouldn't there be some volume for all options?

  6. #6

    Default Re: Exchanged Traded Options question

    It depends on the stock - in some stocks the market makers are required to provide spreads and others they aren't. If there is no bid/offer or volume you can still usually get a spread by phoning your broker and getting them to ask the market maker for one, or alternately if you put an order on the bid or offer within a sensible range, the market maker(s) will flash up a spread briefly.
    Don't take investment advice from seafood.

  7. #7

    Default Re: Exchanged Traded Options question

    The market makers usually quote 5-10 contracts for at the money MQG options. It may become difficult to quickly liquidate a position when the options become deep in the money or go far out of the money after a large move in the share price. That's when it helps to have a full servive broker who can request quotes from the market makers.

  8. #8

    Join Date
    Aug 2008

    Default Re: Exchanged Traded Options question

    Actually market makers continuous quote at/close to the money on MQG and normally respond to a quote request on deep in/out of the money.

    You definitely don't require a full service broker, just ring up your discount broker or do as cuttlefish suggested, quotes will come up.

  9. #9

    Default Re: Exchanged Traded Options question

    Thanks a lot for all the replies! It's definitely helped my understanding. Now this is answered, I'll worry about other things

Similar Threads

  1. Company options - basics
    By Gordon in forum Beginner's Lounge
    Replies: 22
    Last Post: 27th-January-2010, 11:33 PM
  2. Trading Options on the London Stock Exchange?
    By Seneca60BC in forum Derivatives
    Replies: 1
    Last Post: 14th-March-2009, 06:46 AM
  3. Options liquidity
    By aleckara in forum Derivatives
    Replies: 15
    Last Post: 18th-November-2008, 02:12 PM
  4. Company traded options
    By prawn_86 in forum Beginner's Lounge
    Replies: 2
    Last Post: 1st-June-2007, 08:31 AM
  5. BHP Call Option Question
    By Jeffers in forum Derivatives
    Replies: 24
    Last Post: 1st-June-2005, 08:04 AM

Tags for this Thread


Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
Aussie Stock Forums