US and local options trading goes online
Australian investors can now undertake online spread trading of options in both the US and Australian markets.
This follows the announcement that broker Options-Xpress has been granted Australian Stock Exchange (ASX) trading participant status and is launching an online trading service for local investors.
OptionsXpress general manager, Stuart Cureton, said the company was responding to demand from its current database of local investors, who wanted online access to trade US options.
He said interest in options markets had grown by about 20 per cent in the past few years on the back of increasing investor awareness and understanding of options.
A recent ASX-commissioned report into the retail options market found Australian traders thought the US market offered greater choice, volume, liquidity and cheaper brokerage than local markets. US options markets also offered long dated contracts and stop loss facilities, which local options markets did not.
According to Cureton, online options trading is typically less expensive than trading through brokers.
“But it’s also about empowering people, having the tools and capabilities at your fingertips to help you evaluate what you want to do, and then allow you to execute that in one log-in session,” he added.
He said the new system also allowed users to execute more complex trading strategies and have options traded automatically on recommendations by third-party advisory services.
The majority of clients for the new service are expected to be individual investors, but Cureton said “deep negotiations” were underway with several dealer groups, and announcements of future partnerships would be made in coming months.
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