Differences between company options and exchange traded options
Company options are issued by companies for the purpose of raising funds. They give shareholders an opportunity to buy new shares at a fixed price on or before a predetermined date. This gives the company the ability to raise funds for future projects. The exercise of company issued options results in an increase in the company's capital. The terms and conditions are determined solely by the company. All company options are call options.
Exchange traded options (ETOs) are traded over existing shares. Their exercise results in a transfer of ownership of the underlying shares, and not in an increase in the company's capital. The company is not a party to the contracts traded.
An example of a company option is (AEEO) AURA ENERGY LIMITED, OPTION EXPIRING 31-DEC-2008.
The company option is traded like shares. If you type in the code (AEEO) in the share price section of the ASX website's prices search page it will give you the current price (20 minute delayed feed).
Please note that the company option will cease trading normally around five business days before the expiry date listed.
Details of the company option can be obtained from the share registry, or the company itself. You can find the contact details on the by typing the stock code (AEE) on the ASX website's share prices search page.
How to find a list of company options
You can find a list of company options on the Trading Room website. Click on the 'Quotes & Charts' tab at the top then click on the 'Code lookup' link. Under the drop down menu next to 'Security Group' you will see Company Option. Leave the other fields as is, and hit 'search'. This will give you a list of company options. Again it is important to be aware that the last traded date is different to the expiry date. It generally is about five days before this.
Information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice from an Australian financial services licensee before making any financial decisions. Although ASX Limited ABN 98 008 624 691 and its related bodies corporate (“ASX”) has made every effort to ensure the accuracy of the information as at the date of publication, ASX does not give any warranty or representation as to the accuracy, reliability or completeness of the information. To the extent permitted by law, ASX and its employees, officers and contractors shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided or omitted or from any one acting or refraining to act in reliance on this information.
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