Trader Dealer clients can now execute Exchange Traded Option (ETO) orders online. From as little as $26.40 per trade, you can buy call or put options, or sell call options as part of a covered-call or buy write options strategy with ease.
The Mechanics of Trading Options
To buy a call or put option you must have sufficient cleared funds in your nominated Cash Management Trust account, or you must have funds available after selling any existing long option positions. Alternatively you will have funds available from the proceeds of a sale of shares, however these proceeds cannot be used to buy options until two days after the sale date of the shares.
To place a covered call trade you must ensure that you have lodged sufficient underlying stock to the ACH. Once this collateral is lodged you can write a call option on that same underlying.
For call buy-writes you must ensure that you have purchased the stock prior to writing the call option on the same underlying. You must have sufficient cash to buy the stock and sufficient cash margin for your written call until the bought stock has settled and lodged to the ACH.
Your options position will appear on your trading platform the instant the order trades. For long option positions you will have a positive portfolio holding, and subsequently short option positions are represented by a negative holding.
If you are assigned on your written call option positions, you will be required to settle the trade by using your stock collateral position to offset your written call position. An exercise fee applies.
On completion of the trading day, option trades of the same series and the same trade side of up to 100 option contracts will be booked as a single contract note. This confirmation will be generated and sent via e-mail.
Contained in this confirmation are all options traded on the same day as well as the brokerage and exchange fees charged. This confirmation can be printed as an official invoice for recording purposes.
Before you are ready to trade options, please ensure that you have signed the additional forms related to options trading with Trader Dealer, which includes the acknowledgment of having read the Product Disclosure Statement for ETOs and LEPOs, as well as reading and signing the Derivatives Client Agreement.
For more information on Options, please visit the ASX website.