Question regarding Exchange Traded Options

rhyslivs · 4 May 2009

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?

Cheers,

Rhys

cooper1308 · 4 May 2009

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

woozie3 · 17 January 2010

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.

NeuromanceR · 17 January 2010

Re: Exchanged Traded Options question

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

woozie3 · 18 January 2010

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?

cuttlefish · 18 January 2010

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.

bilo83 · 18 January 2010

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.

cutz · 18 January 2010

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.

woozie3 · 18 January 2010

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

Question regarding Exchange Traded Options

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