In addition to options written directly over an index, ASX also offers options directly over index futures. These contracts are supported by several Official Market Makers who respond to quote requests in all strikes.
The underlying for the ASX SPI 200™ Index Options is the ASX SPI 200™ Index Futures. The ASX SPI 200™ Index Option has an underlying contract size of 1 and a tick value of $25 per point. The contract is an American style option and so may be exercised at any time until expiry.
ASX SPI 200™ Index Options are traded on the SYCOM platform which is the same platform as the ASX SPI 200™ Index Futures. As a result, margin offsets between the two contracts are available. ASX SPI 200™ Index Options are not margined up-front. Rather, they are futures-style margined and are marked to market daily over the life of the option. Please refer to information on SPAN margining.
Contact an ASX 24 participant (PDF 65KB) to start trading the ASX SPI 200™ Index options.
For trading information on the IRESS system, the code for ASX SPI 200™ Index Options is APmycxxxx. AP denotes the SPI 200 Index product, the m is the expiry month (see table below), y the expiry year, c or p depending on whether the option is a call or a put and the last four digits are the expiry price.
To date, participation in the ASX SPI 200™ Index Options has been primarily institutional. As a result, ASX offers Exchange for Physicals which is an off-market facility allowing investors to switch their ASX SPI 200™ Options holding for another security.
ASX SPI 200 Index Options strategies
ASX SPI 200™ Index options strategies may be combined with the underlying ASX SPI 200™ Index options to create a variety of different strategies.
Bullish view - How do you protect a short futures position?
Buy call options. During the market rise the increase in the price of the call option will help counter the fall in the value of the short futures position.
Example - You have sold a ASX SPI 200™ Index Futures contract (gone Short) for 6050 points and want to protect yourself from a significant rise in the futures price. You could buy a 6050 ASX SPI 200™ Index call option to ensure that you can buy if the market rises significantly. This allows you to at least close out your current bought futures position by buying at 6050 points. This option would protect your short position until its expiry date.