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European Options on Australian Stocks

Discussion in 'Derivatives' started by mdavis, Sep 14, 2019.

  1. mdavis

    mdavis

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    hi all
    I have done options for a while
    I like diagonals.
    I fear being exercised
    It appears that the major stocks in Australia also have European options
    Could you tell me which ones eg BHP
    and any thoughts on European options on Aussie Stocks
    Regards
    Michael
     
  2. Sharkman

    Sharkman

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    when i think of ASX European stock options two words immediately come to mind - horrible liquidity. followed by two more words - hideous spreads

    you can tell European options by the strikes, they are usually one cent higher than the strikes of the American ones. your brokerage platform should indicate this as well. i don't have a list of which stocks have them, but it would be only the very largest caps, maybe only the top 10

    i experimented with these some time ago as part of my naked put --> dividend strip --> covered call strategy. the idea was to write near ATM naked puts expiring the month before ex-div date, take delivery if assigned, then turn around and sell 2 month covered calls over it

    since i didn't want to get the stock called away, at least not until after it had gone ex-div, i tried using European options on the covered calls. and quickly gave up on the idea after a few months. the liquidity is terrible, the spreads are ridiculously wide and i often didn't even get a fill going 3 or 4 ticks to their side of the mid

    so i went back to using the American options. more of a hassle having to watch it more closely just before ex-div in order to be ready to close out if necessary to protect the stock position from being called away, but way better fills

    of course these days i don't use the strategy very much anymore due to no margin on IB :mad:
     
    peter2 and aus_trader like this.
  3. cutz

    cutz

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    Hi.
    The ASX large caps. have euro options listed, if you require a particular strike a listing can be requested, in my experience liquidity is ok but I only trade options on the bigger stocks.
     
  4. Garpal Gumnut

    Garpal Gumnut

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    One has to have nerves of steel trading oversea Options

    I've never done it, but apart from sheaths one needs weapons.

    I salute all Option Traders

    They make it easy for us punters.

    gg
     
  5. cutz

    cutz

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    Ha Ha , All good ? Depending on how positions are managed options can carry less risk than stocks. BTW euro style option simply refers to its specifications, euros can't be exercised prior expiry.
     
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