St George offers margin lending call options
TheSt George Bankhas opened the way for its margin lending clients and their financial advisers to enter the murky depths of call options.
Financial planners are now able to write call options for St George margin lending clients, which means the clients can earn money from their investments during times when their portfolio remain relatively static.
Money earnt from premiums paid for call options gives margin investors the opportunity to make money from their investment, which can be used to retire debt on their margin loan for example, during times when their investment is otherwise not appreciating.
The downside, of course, is that buyers of call options are likely to enforce their right to the option and buy the shares if the price of an investment does appreciate, effectively removing the gains an investor stood to make for selling the option in the first place.
“[Writing call options] is a useful strategy if the price of the particular shares a client holds is remaining relatively static,” St George head of margin lending Andrew Black says.
“However just as call options can enhance the potential for additional returns, it can also enhance the risks,” he added.
St George margin lending call options are available to financial planners and advisers with no transaction fees.
Recommended for you
An adviser has received a written reprimand from the Financial Services and Credit Panel after failing to meet his CPD requirements, the panel’s first action since June.
AMP has reported a 61 per cent rise in inflows to its platform, with net cash flow passing $1 billion for the quarter, but superannuation fell back into outflows.
Those large AFSLs are among the groups experiencing the most adviser growth, indicating they are ready to expand following a period of transition and stabilisation after the Hayne royal commission.
The industry can expect to see more partnerships in the retirement income space in the future, enabling firms to progress their innovation, according to a panel.
