Options Trading and ETOs

Options trading - Minc tools for the experienced investor

Options are flexible tools for experienced investors. They can be used to:

·         Profit from a view, even when the market is falling or static

·         Benefit from share price movements for less than the cost of a direct investment

·         Earn extra income from your portfolio

·         Protect your existing investments

ETO orders for as little as $24.20 per trade

Minc’s clients can now execute Exchange Traded Option (ETO) orders online via the webIRESS Trading Platform. From as little as $24.20 per trade, clients can buy call or put options or sell call options as part of a covered-call or buy write options strategy with ease.

Getting Started

In order to start trading options, you must:

·         read the Product Disclosure Statement for ETOs and LEPOs (285 Kb)

·         read and sign the Derivatives Client Agreement with Berndale Securities (93 Kb)

Sufficient Cleared Funds

To buy a call or put option you must have:

·         Sufficient cleared funds in your nominated Cash Management Trust account or approved margin lender

·         Funds available after selling any existing long option positions, or

·         Funds available from the proceeds of a sale of shares. However these proceeds cannot be used to buy options until two days after the sale date of the shares.

Covered Call Trade - sufficient underlying stock

To place a covered call trade you must ensure that you hold sufficient underlying stock for lodgement to the ACH.

Call Buy/writes

For call buy/writes you must ensure that you have:

·         purchased the stock prior to entering the order to write the call option on the same underlying.

·         sufficient cash to buy the stock, and

·         sufficient cash margin for your written call until the bought stock has settled and has been lodged with the ACH (usually on T+4).

Real time trading record

Your options position will appear on your trading platform the instant the order has been executed.

Long/short options positions

For long option positions you will have a positive portfolio holding, and subsequently short option positions are represented by a negative holding.

Written Call Options

If you are assigned on your written call option positions, you will be required to settle the trade by using your lodged stock collateral to offset your written call position.

An exercise fee levied by the ACH applies.

Trading Statement via email

A Trading Statement ("confirmation") will be generated and sent via e-mail. Contained in this confirmation are all options series traded on the same day as well as the brokerage, exchange fees and GST charged.

This confirmation can be printed as an official invoice for recording purposes.

You will also receive a Trading Statement each day while you hold any option positions, and a Monthly Statement which should be retained for taxation purposes.