Options trading

Questions

Answers

  • Can I trade options?

    Yes, CMC Markets Stockbroking offers options trading on our fully integrated platform, which will give you the flexibility and ability to protect, grow and diversify your portfolio.

    If you do not already have Options linked to your CMC Markets Stockbroking account, please complete and return a signed original application form.

  • What is options trading?

    Options gives you the flexibility and ability to protect, grow or diversify their position, you can fine tune your risk exposure to meet your appetite. With a number of strategies and jargon, options can appear complex however all options strategies work on the same principle. Options allow you to ‘lock in’ a future buy or sell price for an underlying security. The set price you agree on won’t change and it’s this fixed element that smart investors rely on. Options trading just got more convenient with our fully integrated platform, all the tools you need to create and execute options strategies at your fingertips.

    Options can be used to:

    • Earn income from your share portfolio
    • You can write options against shares you already own to earn additional income. Whilst this will generate income upfront from the premium, you’ll be obliged to deliver the shares at the agreed price if the option is exercised.
    • Generate wealth in rising and falling markets
    • As options are classed as either call or put options, you can generate wealth from rising and falling markets. You can profit from a call option in a rising market by locking in a buy price now and benefiting from the underlying security’s capital growth over time. Or alternatively, you can benefit from a put option in a falling market, by locking in a high sale price before the security’s value falls.
    • Hedge against share price falls
    • Options can be used to offset potential falls in share prices by taking put options. This gives you the right to sell your shares at a pre-set price for the life of the option, no matter how low the share price may drop.

  • Are all ASX products available on the Pro platform?

    Currently all listed equities, options, warrants, hybrids, interest rate securities and ETFs are available on the Pro platform. mFunds are currently not available, we will be adding these in the future. If you need to access products not on the Pro platform, you can find them on our standard online trading platform.

  • Why trade options with CMC Markets?

    CMC Markets Stockbroking offers a sophisticated and professional solution to options traders. Available on both platforms – standard and Pro – options trading has never been more convenient.
    With our unique analytical tools, we help you to;

    • Understand your book with the price estimates and display of real time options Greeks
    • Be more efficient with your capital using the real time estimated margin
    • Test your strategies with the interactive pay off diagrams

    Reporting on your portfolio has never been simpler, all products display in easy to read Profit and Loss statement, order history and watchlists.

  • What functionality is available on the platform?

    There are four options trading levels and you will be able to complete an in-platform quiz to qualify for each level. Each level increases your risk exposure and additional trading functionality. On the CMC Markets Stockbroking platforms you can, depending on your trading level:

    • Sell uncovered calls and puts
    • Execute multi-legged options
    • Build and execute complex strategies
    • Understand your book with the Theoretical Price estimate and display of Options Greeks
    • Use interactive pay-off diagrams to understand your risk and exposures in real time.
    • Report on your whole portfolio with simple and efficient combined watch lists, Profit and Loss statements and orders history.

  • Can my Options trading level be downgraded ?

    Yes, CMC Markets reserves the right to downgrade your access levels if a trading breach has been identified on your account or if we feel you do not fully understand the risks of various strategies. Once your account is downgraded, you will be unable to increase your access levels.

    If you believe an error has occurred in this instance, please contact us for further information

  • What Options level will I be trading on?

    You can view your Options trading level through either the standard or Pro platform.

    standard platform

    Click through to increase your trading level by selecting cogwheel > ‘Trading Settings’.

    Pro platform

    Click through to increase your trading level by selecting Account > ‘Options Trading Levels’.

    When clicking through to the ‘Your Options Information’ page from either standard or Pro platform, you will see displayed the current level you have achieved.

  • How do I change my Options trading level?

    You can change your Options trading level through either the standard or Pro platform.

    standard platform

    Click through to increase your trading level by selecting cogwheel> ‘Trading Settings’.

    View the strategies available to each options trading level, and select the options quiz level you wish to complete

    Pro platform

    Click through to increase your trading level by selecting Account> ‘Options Trading Levels’.

    View the strategies available to each options trading level, and select the options quiz level you wish to complete

  • What else should I know about Options trading?

    Please click here to view other helpful information about Options trading.

  • How can I request a quote from Market makers?

    You may request a quote from Market makers when placing an Options trade in the Pro platform. Refer to our Pro platform quick guide (Section 6) to find out more.

    Market makers are under contractual agreement with the ASX. According to the quoting requirements, Market makers are not required to provide quotes in all series, or at all times and as such there can be no guarantee that all series will have prices displayed.

    You may view the quoting requirements in detail in the ASX ETO Market Making Scheme

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