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ETF Options

Options on Exchange Traded Funds (ETFs) are amongst the most heavily traded in the world. These trade just like equity options, with the ETF tracking the price performance and yield of specific indices.

In an Australian first, ETF options now give investors the ability to trade listed options over domestic and international markets with the benefits of collateral lodgement and cross-margining.

What are Options ETFs?

ETFs are financial products which hold portfolios of shares, designed to closely track the price performance and yield of specific indices.

As ETFs trade like stock, options on these products are operationally similar to equity options. Options on ETFs are physically settled and have a European-style exercise feature.

Why Options ETFs?

Buying calls and puts limits the buyer’s risk to the cost of a contract. It’s a fraction of the cost of buying/shorting the actual ETF, but still lets the buyer profit from favourable moves.

Options can also be used to hedge a position, or to create an additional stream of income through writing options on already established ETF positions.

Trading Options on ETFs

Trade options on ETFs through your broker via the same account you use to access equity and index options.

All trading is based in Australian dollars.

Look for the STW – S&P/ASX 200 code

Options – Ability to protect, grow or diversify

Used wisely, Options have the power to protect, grow or even diversify your position, and because options can be used regardless of sharemarket conditions, they are popular with many investors.

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ETFs – Exposure to a range of shares

Exchange traded funds (ETFs) can be a low-cost way to get investment returns similar to a share index or another underlying asset.

 

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Take the Options course

Take this course to learn how to magnify profits or protect your portfolio by buying or selling options.

Beginner course

Advanced course

Watch options videos

Take the ETF course

In this course, learn how to establish a diversified portfolio easily and cost-effectively with a single trade. This course has been updated and now covers fixed income and commodity ETFs in detail.

ETF/ETP course

Watch ETF video