Trade ASX Exchange Traded Options with Sequoia Direct

ASX Exchange Traded Options (Options) are a contract between two parties, giving the buyer the right – but not an obligation – to buy (Calls) or sell (Puts) an underlying security at a predetermined price at a particular time in the future. Depending on the style of option you hold, you can exercise at any time prior to expiry (American style) or only at expiry (European style).

In order to trade options, you need to complete and sign a Derivatives Client Agreement Form and acknowledgement that you have read and understood the ASX Product Disclosure Statement for ETO’s and LEPO’s and have sufficient funds in your nominated cash account. ASX Options settle on a T+1 basis.

Sequoia Direct clients are permitted to buy both Calls and Puts and sell covered calls provided you have lodged sufficient underlying securities with the Australian Clearing House (ACH). Sequoia Direct does not permit naked call selling or put selling.

Options will automatically exercise or lapse at the expiry date. If you are assigned on a written call option, you will be required to settle the trade by using existing securities to offset your written call position.

On completion of each ASX trading session your trades executed for each option are aggregated and booked at the average price. Confirmation is then emailed to you detailing the type, quantity and costs associated with this via a contract note. This confirmation serves as your official trade record. Note that brokerage charges apply per confirmation, not per order.

Useful Information

Understanding Options Trading

Warrants are financial instruments issued by banks and other institutions and are traded on ASX. They are very broadly split into investment-style products and trading- style products. Warrants are a form of derivative – that is, they derive their value from another ‘thing’ (underlying instrument)