Tailor Made Combinations

Combinations such as covered calls, spreads, and rolling from one expiry to the next, trade on the ASX Integrated Trading System.

Tailor Made Combination orders automatically interact with the individual component series. Derived orders may be be generated to increase the possibility of trading your total combination.

Example

Assume you want to roll an April expiry option into a series expiring in May, for a net credit of 20 cents.

Current market prices are:

  Bid Offer
April expiry 28 32
May expiry 49 55

Entering the combination as a TMC would result in the system generating an offer in the May expiry at 52 cents. If the offer of 52 cents is traded, then the system would automatically transact the purchase of the April options at 32 cents. The result is that you have traded the combination for the net credit of 20 cents.

A derived order will also be created in the April expiry series (a bid of 29 cents). If this bid is traded, the May leg will automatically be traded to result, again, in the sale of the combination for 20 cents. 

As the market in either leg moves, the derived orders will be adjusted to maintain the required 20 cents credit. 

The derived order feature ensures that every combination order has the best possible chance of being filled. The greater number of orders in the system will also significantly improve options market liquidity.

For more detailed information, please refer to Notice No. 060: 23 April. (PDF 197KB)