Futures. Leverage for sophisticated traders

Size: px
Start display at page:

Download "Futures. Leverage for sophisticated traders"

Transcription

1 Futures Leverage for sophisticated traders

2 FSR TERMINOLOGY CHANGES ASX has changed its business framework for trading, clearing and settlement. As a result there have been changes to the terminology used in this document. OLD TERM Options Clearing House Pty Ltd OCH ASXF Pty Ltd ASX Futures Exchange ASXF Exchange ASX Business Rules SCH Business Rules OCH Business Rules OCH Derivatives Clearing Rules OCH Clearing Rules ASXF Exchange Business Rules ASXF Business Rules Broker ASX PO Participating Organisation RIOT Non-Broker Participant (NBP) Limited Purpose NBP NSSP Non sponsoring settlement participant Security Securities Shares Derivative DTF or Derivatives Trading Facility Clearing Participant Only (currently derivatives only) Third Party Clearer Non-CHESS Approved Security Foreign Portal Dealer Participating ASX Security Participating Foreign Security Participating Foreign Exchange NEW TERM Australian Clearing House Pty Ltd ACH ASX ASX Market Rules ASTC Settlement Rules ACH Clearing Rules ASX Market Rules ASX Market Participant or Market Participant (may also be a ACH Clearing Participant and/or ASTC Settlement Participant) Market Participant / Trading Participant (may also be a ACH Clearing Participant and/or ASTC Settlement Participant) ASX Market Participant or Market Participant (Trading Participant only for selected products) and Market Maker General Settlement Participant Specialist Settlement Participant Account Participant Financial Product (except for overseas products) Financial Product DTP or Derivatives Trading Platform Direct Clearing Participant General Clearing Participant Non-CS Approved Product Overseas Portal Dealer Participating ASX Traded Product Participating International Financial Product Participating Overseas Exchange For further details of the Financial Services Reform terminology changes, please visit

3 Introduction Sharemarket investors are using an increasing range of investment strategies and products including exchange traded options, LEPOs and warrants. ASX now offers Mini Index Futures futures contracts based on leading share price indices. ASX Mini Index Futures offer a simple and efficient way to exploit short term trading opportunities while at the same time giving you substantial leverage. They offer a level of exposure that can be tailored to suit your portfolio. The benefits of ASX exchange traded options and LEPOs also apply to ASX Mini Index Futures, including: market makers providing a liquid, competitive market; the ability to use shares as collateral to cover your initial margin obligations; and ASX s world-class derivatives trading, clearing and settlement systems. 1

4 What are ASX Mini Index Futures? 2 ASX Mini Index Futures are similar to the popular e-mini futures on the S&P 500 Index and the Nasdaq 100 Index in the US and the Mini FTSE 100 Index futures in the UK. Index futures contracts currently offered by ASX are: ASX Mini50 futures; ASX Mini200 futures; and ASX Mini200 Property Trust futures. The dollar value of each ASX Mini Index Futures contract is based on a $10 per index point multiplier. For example, if the futures contract is trading at 3290 points, the contract value is $32,900. The S&P /ASX50 Index and S&P /ASX200 Index represent around 75% and 90% of total ASX domestic stockmarket capitalisation respectively. The choice of futures contracts over these two indices enables you either to focus your strategy on the market leaders (the S&P/ASX50 Index), or to trade a view on a more broadly-based index (the S&P/ASX200 Index). Mini 200 Property Trust futures give you exposure to the Property Trust subsector of the S&P/ASX200 Index. How are futures different from other derivatives products? Futures are relatively straightforward compared to other derivatives products. The broad definition of a futures contract is an agreement to buy or sell a particular asset (or cash equivalent) on a specified future date at a price agreed upon today. Like many derivatives products, futures are short-term contracts with a number of maturity dates available for trading at any one time. However, there are a number of differences between futures and products such as exchange traded options, including: there is no exercise price for a futures contract you simply buy or sell a contract with the maturity date of your choice at the market price at the time; you do not pay a premium when you trade a futures contract instead you pay a small deposit or initial margin; futures represent an obligation to either buy or sell the underlying value rather than just a right to do so. Both buyers and sellers have significant exposure should the market move against them, and therefore must pay an initial margin and subsequent variation margins; futures give you more direct exposure to the underlying value in simple terms, they are like trading an exchange traded option with a delta of approximately 1. Both buyers and sellers of futures contracts may be margined. An initial margin is payable when a futures contract is traded. The initial margin is similar to the risk margin paid by writers of exchange traded options. Variation margins may also be payable as the futures position is settled to market on a daily basis. The variation margin is similar to the premium margins paid by option writers.

5 Benefits of ASX Mini Index Futures Exposure to the broad sharemarket ASX Mini Index Futures enable you to trade a view on the broad sharemarket, or on a sector of the market, in one transaction. Instead of trying to construct a portfolio of shares that make up an index, you can simply and efficiently take a position using an index futures contract. Leverage ASX Mini Index Futures provide you with leveraged exposure to moves in the underlying index. Your initial outlay when you trade a futures contract is a small percentage of the value of the contract. Therefore, if the market moves in your favour, the percentage returns you make from trading the futures contract will be significantly higher than the percentage movement in the underlying index. Example Buying futures to gain exposure to a rise in the market Assume it is early August, and the S&P/ASX50 Index is trading at You believe the market will rise over the next few weeks, and decide to buy a September ASX Mini50 future. A week later, the index has risen to 3030 points, and you decide to close out your position by selling the September futures contract. The example demonstrates the leveraged exposure you gain by trading futures. Because your outlay at the time of the opening transaction is limited to the initial margin ($900), the percentage return made on the futures contract is much greater (at 43.3%: $1,290 profit on $900 outlay) than the price movement of the underlying index (at 4.48%:2900 to 3030). It is important to understand that the leveraged exposure provided by futures can also lead to substantial losses. If the market moves against you, the losses you suffer from trading futures will be greater in percentage terms than the movement in the underlying index. You should discuss whether this risk is appropriate to your circumstances with your investment adviser. Note that the example above does not include brokerage, exchange fees or any interest charges. It also does not show the daily variation margins you would have paid or had credited to you. More information on margining is provided later in this brochure. 3 Example Date 2 August % move % return on in index futures trade Opening trade Buy 1 September ASX Mini50 future Index level 2900 Futures price/ value 2946/ $29,460 Initial margin paid $900 Date 10 August Closing trade Sell 1 September ASX Mini50 future Index level 3030 Futures price/ value 3075/ $30,750 Initial margin refunded $900 Profit $1, Note: the initial margin assumed in this example is $900. Initial margins are determined by ASX s clearing house according to the volatility of the underlying index and are reviewed regularly.

6 4 Trade declining markets With ASX Mini Index Futures it is just as easy to go short the market as it is to go long. You can trade a bearish view on the market by selling index futures. If the market falls as predicted, you can then take profits by closing out your position, or alternatively receive a cash settlement when the contract matures. It is as simple to sell a futures contract as it is to buy one. In both cases, you pay an initial margin on opening your position. There is no need to own shares or to have the full cash value of the contract in order to sell a futures contract. Example Selling futures to gain exposure to a fall in the market Assume it is early February, and the S&P/ASX200 Index is trading at The market has risen sharply over the previous six weeks, and you believe the index may fall back during the next month. You therefore sell a March ASX Mini200 futures contract. Two weeks later, the index has fallen to 2920 points, and you close out your position by buying back the March futures contract. Hedge a physical position You can use ASX Mini Index Futures to hedge your share portfolio. For example you may have a broadly based share portfolio that trades approximately in line with the S&P/ASX200 Index. By selling ASX Mini200 futures you can lock in the value of your portfolio for the life of the futures contract. It is important to realise that the success of a hedging strategy will depend in part on how closely movements in the value of your Example portfolio track movements in the index underlying the futures contract. This is often referred to as basis risk. You may already be familiar with the use of put options to protect your shareholdings. There are some important differences between selling futures and buying put options to hedge a portfolio: in selling futures you do not incur the expense of the premium you must pay when you buy a put option; and in selling futures you do not have the possibility of benefiting from a rise in the value of your shares, as any increase in their value will be offset by a loss on the futures contract; in contrast, buying a put option still allows you to benefit from a rise in the value of your portfolio. Integrated ASX derivatives markets ASX Futures are traded and cleared using the same ASX systems that are used in ASX s options and LEPO markets. Depending on how your accounts with your broker are set up, you may be able to: implement combinations and spreads employing different derivatives products, as well as shares; reduce the cash you might need to provide for margin obligations by using your shares as cover; lodge shares as collateral to cover all your open positions in options and futures; and offset the credit premium of bought option positions against futures initial margin liabilities. Date 4 February % move % return on in index futures trade Opening trade Sell 1 March ASX Mini200 future Index level 3000 Futures price/ value 3013/ $30,130 Initial margin paid $900 Date 15 February Closing trade Buy 1 March ASX Mini200 future Index level 2920 Futures price/ value 2930/ $29,300 Initial margin refunded $900 Profit $ Note: the initial margin assumed in this example is $900. Initial margins are determined by ASX s clearing house according to the volatility of the underlying index and are reviewed regularly.

7 Pricing ASX Mini Index Futures? When you buy an ASX Mini Index Future, you agree to buy the index underlying the futures contract on a specified date in the future. Your profit or loss depends on how far the price of the futures contract at maturity, or when you close out, is above or below the price at which you bought the contract. Price /level Futures price When you sell a future to open a position, you agree to sell the index on a specified date in the future. Again, your profit or loss depends on the difference between the price of the futures contract at maturity, or when you close out, and the price at which you sold the contract. The full value of the futures contract is not paid or received when the position is opened instead both buyer and seller pay an initial margin. The traded price is the basis on which profit or loss is calculated at maturity or on closing out the position if this takes place before maturity. Before maturity, the futures contract typically trades at a premium to the level of the underlying index. The difference is often referred to as the cost of carry. This amount reflects the cost of holding the shares over the life of the futures contract, less the amount that the shareholder would receive in dividends on those shares during this time. As maturity approaches, the price of the futures contract and the underlying index tend to converge. The following chart shows the typical relationship between the price of the futures contract and the level of the underlying index over time. Note that it is also possible for a futures contract to trade at a discount to the underlying index. Still, convergence of the futures price and the index level will take place as maturity approaches. Example Market price of an ASX Mini200 future You buy one December ASX Mini200 futures contract in early October and hold it to maturity. Example Date Opening trade Index level Time 9 October Buy 1 Dec ASX Mini200 future Index level 3050 Futures price/value 3070/$30,700 Futures maturity At maturity on 20 December, the futures contract is cash settled. Date 20 December Futures price/value 3160/$31,600 Profit = value of future at maturity traded price = $31,600 $30,700 = $900 Your profit is the difference between the futures settlement price of 3160 at maturity and the price you paid for the contract, multiplied by the index multiplier of $10 per index point. The example shows a contract held until maturity. You may of course choose to close out your futures position at any time prior to the maturity date. 5

8 Maturity and settlement 6 ASX Mini Index Futures mature on the third Friday of the maturity month, provided this day is a trading day. The last trading date is the day preceding the maturity date. Expiry dates for index option contracts coincide with ASX Mini Index Futures maturities. All ASX Mini Index Futures remaining open at maturity are cash settled. The settlement price used is the ASX Futures Opening Price Index Calculation (OPIC). The OPIC is based on the opening price of each stock in the index on the morning following the last trading day. As the stocks in the relevant index open, the first traded price of each stock is recorded. Once all stocks in the index have opened, an index calculation is made using these opening prices. This method is used to settle major index futures contracts internationally, including contracts over the S&P 500, the S&P 100 and the Dow Jones Industrial Average in the United States, and over the Nikkei 225 and Nikkei 300 in Japan. The OPIC method is regarded as an effective way to manage volatility often associated with the maturity of index futures contracts. Because the Australian market staggers the opening of stocks, it is not possible for the entire market to be traded in one hit during the opening period. Further, market opening is typically a time of high liquidity, and therefore the time the market is best able to absorb orders placed by traders looking to unwind index arbitrage strategies. Nevertheless, investors should be aware that trading patterns around maturity time often exhibit higher than average volatility.

9 Contract specifications ASXF Mini Index Futures contract specifications Underlying index Contract size/multiplier Quotation/tick size Contract months Maturity date Last trading day Trading hours Cash settlement amount Settlement method Initial margin Daily variation margins Margin cover/collateral Contracts are over the S&P/ASX200 Index, the S&P/ASX50 Index, and the S&P/ASX200 Property Trusts Sector Index. A current list of all ASX Mini Index Futures is available at Valued at AUD $10 per index point. Prices are quoted as a number of index points with a minimum price movement of 1 index point tick size $ March/June/September/December cycle. The third Friday of the maturity month, provided this day is a trading day. The business day preceding the Maturity date. Normal trading 6.00am to 5.00pm and 5.30pm to 8.00pm (Sydney time). Overseas trading 8.00pm 5.30am. Cash settlement is based on the opening prices of the stocks in the Underlying Index on the morning of the maturity date. An index calculation [(the Opening Price Index Calculation (OPIC)] is made using these opening prices. The OPIC is used by Options Clearing House Pty Ltd (OCH) to settle open index futures contracts. The cash settlement amount is calculated by the calculation agent (Standard & Poor s) based on the OPIC. The settlement amount is then paid or received net of margins on the next business day. Initial margins for both buyers and sellers are determined by OCH according to the volatility of the underlying index and are reviewed regularly. Volatility levels used by OCH are published in circulars which are available on asx.com.au/futures All futures positions for both buyers and sellers are settled to market each day and subject to variation margins. An intra-day margin call may also be made by OCH. Settlement to market margin obligations must be settled daily by the payment of cash. Cash or collateral such as shares, other options and futures positions and, other ASX traded securities, bank guarantees and Austraclear pledged securities may be lodged to cover initial margin obligations. 7 Overseas trading is the period for transactions where a Trading Participant is acting for a client who is not resident in Australia, and the instruction from the client is received outside normal trading hours.

10 Margins and collateral All futures contracts traded on ASX are registered, cleared and settled by ASX s wholly owned subsidiary Options Clearing House Pty Ltd (OCH). Both buyers and sellers of ASX Mini Index Future contracts must pay an initial margin, which is determined by OCH according to the volatility of the underlying index. Details of current initial margins can be found at Both buyers and sellers are also liable for daily variation margin calls. The contract is settled to market on a daily basis, with variation margins either payable to or returned by OCH. The total profit or loss on the trade is equal to the net variation margins received or paid. In the example, the profit on the trade is $1,020. Margin offsets with options Traders can offset the credit premium of bought option positions against futures initial margin liabilities. This means you have less of your assets tied up in the transactions. 8 Using collateral to cover initial margins Over 120 CHESS sponsored stocks and 750 warrants are accepted by OCH as collateral for initial margin obligations. Other options and futures positions may also be used as collateral. A list of eligible collateral can be found at Note that variation margins must be paid in cash. Example The following table shows the margining process for the seller of a December ASX Mini200 future. In this example the initial margin assumed for the ASX Mini200 future is $900. The seller of the futures contract may lodge either cash or eligible collateral to cover the initial margin. Example Date/ Trade Price Initial Margin Settlement to market (cash) 9 Oct Index 3050 Pay $900 Nil Sell 1 future Future Oct Index 3061 Pay $110 Future 3081 ($30,810 $30,700) 11 Oct Index Receive $280 Future 3053 ($30,530 $30,810) 12 Oct Index Receive $660 Future 2987 ($29,870 $30,530) 15 Oct Index Receive $230 Future 2964 ($29,640 $29,870) 16 Oct Index Initial margin reversed: Pay $40 Buy 1 future Future 2968 Receive $900 ($29,680 $29,640) Received $1,020

11 Getting started The first step to trading ASX Mini Index Futures is to contact your ASX Futures Broker. While you may already trade other ASX derivatives products, or SFE products, ASX Futures Business Rules require that you sign an agreement document with your broker prior to being able to trade. More information ASX offers a range of booklets on derivatives trading as well as various courses. If you would like more information on these products and services, phone ASX on, ASX at futures@asx.com.au or visit If you wish to use the one broker for both trading and clearing, you will only need to complete one set of documents. However, if your broker provides trading services only, you may need to complete a separate set of documents with your clearing broker. Your broker will then open a futures trading account with ASXF for you. Before you can place an order to buy or sell futures, your broker will generally require you to deposit cash or collateral to cover potential margin obligations. 9 While you can place an order with any adviser, only an Accredited Futures Adviser can give you advice about what orders to place.

12 This material is general and summary information only. Any advice or recommendation, (including relating to financial products) should be obtained from an Australian financial services licensee or other professional adviser. To the extent permitted by law, no responsibility for any loss arising in any way (including by way of negligence) suffered by anyone acting as a result of this material is accepted by ASX. copyright ASX Operations Pty Limited ABN ( ASXO ). All rights reserved. This publication should not be reproduced, stored in a retrieval system or transmitted in any form, whether in whole or in part, without the prior written consent of ASXO. Edition 2 printed March 2003

13 Futures toll free information line: Internet:

Introduction to Index Futures and Options

Introduction to Index Futures and Options Introduction to Index Futures and Options Disclaimer of Liability Information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice

More information

Understanding Options Trading. ASX. The Australian Sharemarket

Understanding Options Trading. ASX. The Australian Sharemarket Understanding Options Trading ASX. The Australian Sharemarket Disclaimer of Liability Information provided is for educational purposes and does not constitute financial product advice. You should obtain

More information

Index options. Module 9

Index options. Module 9 Course #: Title Module 9 Index options Index options... 1 Topic 1: Why trade index options?... 3 Trade the direction of the index... 3 Leveraged exposure... 3 Protect a share portfolio... 4 Topic 2: How

More information

Understanding Options Trading

Understanding Options Trading Understanding Options Trading Disclaimer of Liability Information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice from an Australian

More information

1300 307 853 cfds@commsec.com.au commsec.com.au. Important Information

1300 307 853 cfds@commsec.com.au commsec.com.au. Important Information CommSec CFDs: Introduction to Indices We re here to help To find out more, call us on 1300 307 853, from 8am Monday to 6am Saturday, email us at cfds@commsec.com.au or visit our website at commsec.com.au.

More information

Understanding Options Trading. ASX. The Australian Sharemarket

Understanding Options Trading. ASX. The Australian Sharemarket Understanding Options Trading ASX. The Australian Sharemarket Disclaimer of Liability Information provided is for educational purposes and does not constitute financial product advice. You should obtain

More information

Module 2 How do ASX Listed CFDs work?

Module 2 How do ASX Listed CFDs work? Module 2 How do ASX Listed CFDs work? Course #: Title Topic 1: Basic features... 3 Opening and closing CFD positions... 3 Novation... 3 CFD pricing... 4 Competition between DPMs... 4 Arbitrage opportunities...

More information

Module 5 Index CFDs. Course #: Title. Version 1 August 2013 1

Module 5 Index CFDs. Course #: Title. Version 1 August 2013 1 Module 5 Index CFDs Course #: Title Topic 1: S&P/ASX 200 CFDs... 3 Initial margin... 3 Variation margins... 3 Cashflows... 4 Topic 2: S&P/ASX 200 CFD strategies... 6 Trade broad market movements... 6 Protect

More information

How options are traded

How options are traded Course #: Title Module 10 How options are traded Topic 1: How options are traded... 3 Trading system... 3 Order types... 3 Combinations... 4 Trading hours... 4 Options taxation is a complex area... 5 The

More information

Exchange Traded Options Product Disclosure Statement (PDS)

Exchange Traded Options Product Disclosure Statement (PDS) Bendigo Invest Direct Exchange Traded Options Product Disclosure Statement (PDS) 1 December 2015 A service provided by CMC Markets Stockbroking Limited AFSL No. 246381 and ABN 69 081 002 851 Table of Contents

More information

Exchange Traded Options Product Disclosure Statement and Application Form

Exchange Traded Options Product Disclosure Statement and Application Form CommSec Adviser Services Phone 1800 252 351 Fax 1300 668 788 Locked Bag 3005 Australia Square NSW 1215 www.commsecadviserservices.com.au advisertrading@cba.com.au Exchange Traded Options Date of Issue:

More information

Module 3 Buying, holding and selling ETFs

Module 3 Buying, holding and selling ETFs Module 3 Buying, holding and selling ETFs Course #: Title Topic 1: Buying and selling ETFs... 3 How trading ETFs is similar to trading shares... 3 How trading ETFs is different from trading shares... 3

More information

PRODUCT DISCLOSURE STATEMENT FOR THE ISSUE OF ASX CFDs BY MORRISON SECURITIES PTY LIMITED

PRODUCT DISCLOSURE STATEMENT FOR THE ISSUE OF ASX CFDs BY MORRISON SECURITIES PTY LIMITED PRODUCT DISCLOSURE STATEMENT FOR THE ISSUE OF ASX CFDs BY MORRISON SECURITIES PTY LIMITED PART 1 This document is part of a Product Disclosure Statement and is Part 1. The other document which makes up

More information

jbwere exchange traded options

jbwere exchange traded options jbwere exchange traded options Product Disclosure Statement (PDS) Preparation date: 25 February 2014 Issued by: WealthHub Securities Limited This PDS was prepared by: WealthHub Securities Limited, ABN

More information

Options. Understanding options trading

Options. Understanding options trading Options Understanding options trading Although Australian Stock Exchange Limited has made every effort to be accurate, it does not guarantee the accuracy of the information in this booklet. Accordingly

More information

Introduction to Equity Derivatives on Nasdaq Dubai NOT TO BE DISTRIUTED TO THIRD PARTIES WITHOUT NASDAQ DUBAI S WRITTEN CONSENT

Introduction to Equity Derivatives on Nasdaq Dubai NOT TO BE DISTRIUTED TO THIRD PARTIES WITHOUT NASDAQ DUBAI S WRITTEN CONSENT Introduction to Equity Derivatives on Nasdaq Dubai NOT TO BE DISTRIUTED TO THIRD PARTIES WITHOUT NASDAQ DUBAI S WRITTEN CONSENT CONTENTS An Exchange with Credentials (Page 3) Introduction to Derivatives»

More information

EXCHANGE TRADED OPTIONS

EXCHANGE TRADED OPTIONS EXCHANGE TRADED OPTIONS PRODUCT DISCLOSURE STATEMENT (PDS) 11 JULY 2014 CONTENTS Purpose of a PDS 2 About E TRADE 2 Part One: General information 3 1. What products does this PDS cover? 3 2. Overview of

More information

nabtrade Exchange Traded Options Product Disclosure Statement (PDS)

nabtrade Exchange Traded Options Product Disclosure Statement (PDS) nabtrade Exchange Traded Options Product Disclosure Statement (PDS) WealthHub Securities Limited ABN 83 089 718 249 AFSL No. 230704 GPO Box 4545 Melbourne VIC 3001 Telephone 13 13 80 nabtrade.com.au Preparation

More information

CMC Markets Stockbroking Limited Exchange Traded Options Product Disclosure Statement (PDS)

CMC Markets Stockbroking Limited Exchange Traded Options Product Disclosure Statement (PDS) CMC Markets Stockbroking Limited Exchange Traded Options Product Disclosure Statement (PDS) 16 May 2011 AFSL No. 246381 and ABN 69 081 002 851 Table of contents Table of contents Part 1 01 General introduction

More information

ASX CFD market fundamentals

ASX CFD market fundamentals Course #: Title Course 1 ASX CFD market fundamentals Topic 1: The ASX CFD Market... 3 What are CFDs?... 3 The popularity of ASX CFDs has arisen from two main features:... 3 ASX CFDs offer additional features

More information

What to consider in an investment

What to consider in an investment Course 4 What to consider in an investment Topic 1: Return on investment... 3 Evaluating an investment... 3 Return on investment... 3 Income... 3 Frequency of income payments... 4 Capital growth... 4 Comparing

More information

EXCHANGE TRADED OPTIONS PRODUCT DISCLOSURE STATEMENT INTERACTIVE BROKERS LLC ARBN 091 191 141 AFSL 245 574

EXCHANGE TRADED OPTIONS PRODUCT DISCLOSURE STATEMENT INTERACTIVE BROKERS LLC ARBN 091 191 141 AFSL 245 574 EXCHANGE TRADED OPTIONS PRODUCT DISCLOSURE STATEMENT INTERACTIVE BROKERS LLC ARBN 091 191 141 AFSL 245 574 Date of Issue: 12 February 2014 INDEX 1. GENERAL INTRODUCTION 4 1.1 Important Information 4 1.2

More information

MARGIN FOREIGN EXCHANGE AND FOREIGN EXCHANGE OPTIONS

MARGIN FOREIGN EXCHANGE AND FOREIGN EXCHANGE OPTIONS CLIENT SERVICE AGREEMENT Halifax New Zealand Limited Client Service Agreement Product Disclosure Statement for MARGIN FOREIGN EXCHANGE AND FOREIGN EXCHANGE OPTIONS Halifax New Zealand Limited Financial

More information

Module 5 International ETFs

Module 5 International ETFs Module 5 International ETFs Course #: Title Topic 1: What are international ETFs?... 3 Exposure to international markets... 3 Why would I want exposure to overseas markets?... 3 Index-tracking... 3 Buying

More information

Exchange Traded Options Product Disclosure Statement (PDS)

Exchange Traded Options Product Disclosure Statement (PDS) CMC Markets Stockbroking Limited Exchange Traded Options Product Disclosure Statement (PDS) 28 June 2013 AFSL No. 246381 and ABN 69 081 002 851 Table of Contents Table of contents Part 1 01 General introduction

More information

Contents. 2 What are Options? 3 Ways to use Options. 7 Getting started. 8 Frequently asked questions. 13 Contact us. 14 Important Information

Contents. 2 What are Options? 3 Ways to use Options. 7 Getting started. 8 Frequently asked questions. 13 Contact us. 14 Important Information Options For individuals, companies, trusts and SMSFs The Options and Lending Facility Contents 2 What are Options? 3 Ways to use Options 7 Getting started 8 Frequently asked questions 13 Contact us 14

More information

Module 1 Introduction to ETFs

Module 1 Introduction to ETFs Module 1 Introduction to ETFs Course #: Title Topic 1: Big picture investing... 3 Which stock to buy?... 3 Why take a big picture approach?... 3 How can you invest in the market?... 4 Topic 2: What are

More information

The risks and benefits of shares

The risks and benefits of shares Course 3 The risks and benefits of shares Topic 1: The risks of shares... 3 The risks of shares... 3 The risk of capital loss... 3 Volatility risk... 4 The risk of poor quality advice... 4 Time for your

More information

Module 1 Introduction to CFDs

Module 1 Introduction to CFDs Module 1 Introduction to CFDs Course #: Title Topic 1: Why use CFDs?... 3 Introduction... 3 Leveraged exposure... 3 Trade rising or falling markets... 3 Protect a physical position... 4 Pairs trading...

More information

IntroductIon to commsec cfds

IntroductIon to commsec cfds Introduction to CommSec CFDs Important Information This brochure has been prepared without taking account of the objectives, financial and taxation situation or needs of any particular individual. Because

More information

Online Share Trading Currency Futures

Online Share Trading Currency Futures Online Share Trading Currency Futures Wealth warning: Trading Currency Futures can offer significant returns BUT also subject you to significant losses if the market moves against your position. You may,

More information

General Forex Glossary

General Forex Glossary General Forex Glossary A ADR American Depository Receipt Arbitrage The simultaneous buying and selling of a security at two different prices in two different markets, with the aim of creating profits without

More information

Warrants. Understanding trading and investment warrants

Warrants. Understanding trading and investment warrants Warrants Understanding trading and investment warrants Disclaimer Information contained in this brochure is general and summary information of the research commissioned by ASX Operations Pty Limited ABN

More information

FUTURES PRODUCT DISCLOSURE STATEMENT. INTERACTIVE BROKERS LLC ARBN 091 191 141 AFSL Number: 245 574

FUTURES PRODUCT DISCLOSURE STATEMENT. INTERACTIVE BROKERS LLC ARBN 091 191 141 AFSL Number: 245 574 FUTURES PRODUCT DISCLOSURE STATEMENT INTERACTIVE BROKERS LLC ARBN 091 191 141 AFSL Number: 245 574 Date of Issue: 5 February 2015 1 INDEX 1. INTRODUCTION...3 1.1 Important information...3 1.2 Purpose of

More information

Protect your shares. Course 7

Protect your shares. Course 7 Course 7 Protect your shares Topic 1: Introduction... 3 The put buyer's rights... 3 Topic 2: How does it work?... 5 Outcome 1 - share price falls... 5 Outcome 2 - share price rises... 6 Profits and losses...

More information

1 Understanding options trading

1 Understanding options trading 1 Understanding options trading Disclaimer Information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice from an Australian financial

More information

CONTRACTS FOR DIFFERENCE

CONTRACTS FOR DIFFERENCE CLIENT SERVICE AGREEMENT Halifax New Zealand Limited Client Service Agreement Product Disclosure Statement for CONTRACTS FOR DIFFERENCE Halifax New Zealand Limited Financial Services Provider No. 146605

More information

Exchange Traded Options Product Disclosure Statement.

Exchange Traded Options Product Disclosure Statement. Exchange Traded Options Product Disclosure Statement. Issued by: ETRADE AUSTRALIA SECURITIES LIMITED ABN: 93 078 174 973 Australian Financial Services Licence No. 238277 Date of Issue: 01 July 2008 Purpose

More information

Taxation treatment of Exchange Traded Options

Taxation treatment of Exchange Traded Options Taxation treatment of Exchange Traded Options 18 May 2011 Patrick Broughan, Director, Deloitte Touche Tohmatsu Ltd Alison Noble, Account Director, Deloitte Touche Tohmatsu Ltd The views in this document

More information

Options Product Disclosure Statement (PDS)

Options Product Disclosure Statement (PDS) Options Product Disclosure Statement (PDS) ISSUE DATE: JUNE 2015 The provider of the services described in this Client Agreement is the Australian Financial Services Licensee, OpenMarkets Australia Limited

More information

INTERNATIONAL SECURITIES TRADING NOW YOU CAN INVEST ACROSS THE WORLD

INTERNATIONAL SECURITIES TRADING NOW YOU CAN INVEST ACROSS THE WORLD INTERNATIONAL SECURITIES TRADING NOW YOU CAN INVEST ACROSS THE WORLD YOU ARE WHAT YOU DO INTERNATIONAL SECURITIES TRADING III CONTENTS CONTENTS Welcome Welcome 1 2 Trade international securities with

More information

Investment. ASX listed investments and asset allocation. Instalments. Australian Shares. Pooled Development Funds. Domestic Shares

Investment. ASX listed investments and asset allocation. Instalments. Australian Shares. Pooled Development Funds. Domestic Shares Financial Planning with Listed Investments ASX listed investments and asset allocation More and more financial advisers are discovering the benefits of incorporating listed investments in client portfolios.

More information

Online Share Trading Currency Futures

Online Share Trading Currency Futures Online Share Trading Currency Futures pic Currency Futures Introduction Currency futures contracts can be hard-working additions to any investor s or trader s portfolio. They provide a way to hedge the

More information

International Securities Trading now you can invest across the world

International Securities Trading now you can invest across the world International Securities Trading now you can invest across the world INTERNATIONAL SECURITIES TRADING iii CONTENTS Welcome 2 Trade international securities with CommSec and Pershing 2 International trading

More information

Information Memorandum. Option Enhanced Investment Loan.

Information Memorandum. Option Enhanced Investment Loan. Information Memorandum Option Enhanced Investment Loan. IMPORTANT NOTICES This document is an Information Memorandum (IM) dated 7 March 2011 and relates to the issue of Option Enhanced Investment Loans

More information

PRODUCT DISCLOSURE STATEMENT COMMSEC EXCHANGE- TRADED OPTIONS

PRODUCT DISCLOSURE STATEMENT COMMSEC EXCHANGE- TRADED OPTIONS PRODUCT DISCLOSURE STATEMENT COMMSEC EXCHANGE- TRADED OPTIONS Issue Date: 12 March 2014. Important Information Changes to this Product Disclosure Statement (PDS) that are not considered to be materially

More information

optionsxpress Australia Pty Limited Exchange Traded Options

optionsxpress Australia Pty Limited Exchange Traded Options Part 1 Incorporating Part 2 - Schedule of Fees and Costs Issued by: ABN: 11 085 258 822 Australian Financial Services Licence No. 246743 Address: Unit 5, 4 Skyline Place Frenchs Forest NSW 2086 Phone:

More information

Taxation Treatment of Futures

Taxation Treatment of Futures Taxation Treatment of Futures October 2003 Any queries regarding this paper can be directed to Patrick Broughan, Taxation Partner Ernst & Young, Melbourne on (03) 9288 8830 IMPORTANT DISCLAIMER Ernst &

More information

A new landmark in trading

A new landmark in trading A new landmark in trading DERIVATIVES MARKET Equity Derivatives Dividend Futures www.jse.co.za Johannesburg Stock Exchange The JSE in collaboration with Deutsche Bank and Investec Capital Markets is launching

More information

Short Selling Australian Stocks

Short Selling Australian Stocks Short Selling Australian Stocks What is Short Selling? The best way to explain short selling is to show the difference between going long and going short. Going Long and Making a Profit To go long means

More information

ebridge Online Trading Facility

ebridge Online Trading Facility Futures Contracts For Difference Product disclosure Statement ebridge Online Trading Facility Issuer: StoneBridge Securities Limited ABN 92 067 161 755 Australian Financial Services Licence No. 238148

More information

How to buy and sell shares

How to buy and sell shares Course 5 How to buy and sell shares Topic 1: Buying and selling shares... 3 Buying and selling shares... 3 Buying shares in a float or Initial Public Offering... 3 Buying and selling shares through a stockbroker...

More information

Powerful tools for investing, speculating or hedging

Powerful tools for investing, speculating or hedging Powerful tools for investing, speculating or hedging DERIVATIVE MARKET Equity Derivatives Single Stock Futures www.jse.co.za Johannesburg Stock Exchange Single Stock Futures are powerful tools for investing,

More information

Currency Derivatives Guide

Currency Derivatives Guide Currency Derivatives Guide What are Futures? In finance, a futures contract (futures) is a standardised contract between two parties to buy or sell a specified asset of standardised quantity and quality

More information

Trading CFDs with Trader Dealer ABN 17 090 611 680 (AFSL NO 333297)

Trading CFDs with Trader Dealer ABN 17 090 611 680 (AFSL NO 333297) Trading CFDs with Trader Dealer ABN 17 090 611 680 (AFSL NO 333297) Pages 1. Overview 3 2. What is a CFD? 3 3. Why Trade CFDs? 3 4. How Do CFDs Work? 4 4.1 Margin 4 4.2 Commission 5 4.3 Financing 6 4.4

More information

Warrants. Understanding trading and investment warrants. ASX. The Australian Sharemarket

Warrants. Understanding trading and investment warrants. ASX. The Australian Sharemarket Warrants Understanding trading and investment warrants ASX. The Australian Sharemarket Disclaimer Information provided is for educational purposes and does not constitute financial product advice. You

More information

ANZ Margin Lending Integrated with E TRADE

ANZ Margin Lending Integrated with E TRADE ANZ Margin Lending Integrated with E TRADE The ANZ Margin Loan - Integrated with E TRADE What is margin lending? Benefits of gearing The ANZ Margin Loan is an integrated facility that allows you to trade

More information

RISK DISCLOSURE STATEMENT FOR SECURITY FUTURES CONTRACTS

RISK DISCLOSURE STATEMENT FOR SECURITY FUTURES CONTRACTS RISK DISCLOSURE STATEMENT FOR SECURITY FUTURES CONTRACTS This disclosure statement discusses the characteristics and risks of standardized security futures contracts traded on regulated U.S. exchanges.

More information

The original purpose of futures contracts was to provide a facility for people to hedge their price risk.

The original purpose of futures contracts was to provide a facility for people to hedge their price risk. Futures Bas sicss Propex Derivatives Pty Ltd 2012 The information in this document and related documents and communication is intended for educational purposes only and does not constitute advice. Redistribution

More information

Understanding ASX Listed CFDs

Understanding ASX Listed CFDs Understanding ASX Listed CFDs Disclaimer Information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice from an Australian financial

More information

ANZ ETFS S&P/ASX 100 ETF. (ASX Code: ZOZI)

ANZ ETFS S&P/ASX 100 ETF. (ASX Code: ZOZI) ANZ ETFS S&P/ASX 100 ETF (ASX Code: ZOZI) INVESTMENT BUILDING BLOCKS FOR A CHANGING WORLD Introducing a suite of innovative exchange traded funds (ETFs) designed for Australian investors by ANZ ETFS,

More information

How The Margin Lending Facility Works

How The Margin Lending Facility Works product resource Margin Lending The Margin Lending facility is subject to the Terms and Conditions of the Margin Lending Facility ( Agreement ). The Agreement sets out your rights and obligations relating

More information

CommSeC CFDS: IntroDuCtIon to FX

CommSeC CFDS: IntroDuCtIon to FX CommSec CFDs: Introduction to FX Important Information This brochure has been prepared without taking account of the objectives, financial and taxation situation or needs of any particular individual.

More information

What is a share? Course 1

What is a share? Course 1 Course 1 What is a share? Topic 1: What is a share?... 3 A share is simply part ownership of a business... 3 Shareholder rights and benefits... 3 How to decide what to buy... 4 Topic 2: What is the sharemarket?...

More information

Risk Warning Notice. Introduction

Risk Warning Notice. Introduction First Equity Limited Salisbury House London Wall London EC2M 5QQ Tel 020 7374 2212 Fax 020 7374 2336 www.firstequity.ltd.uk Risk Warning Notice Introduction You should not invest in any investment product

More information

CHESS. Clearing House Electronic Subregister System

CHESS. Clearing House Electronic Subregister System CHESS Clearing House Electronic Subregister System Exchange Centre, 20 Bridge Street, Sydney NSW 2000 Telephone: 1300 300 279 www.asx.com Information provided is for educational purposes and does not constitute

More information

RISK DISCLOSURE STATEMENT PRODUCT INFORMATION

RISK DISCLOSURE STATEMENT PRODUCT INFORMATION This statement sets out the risks in trading certain products between Newedge Group ( NEWEDGE ) and the client (the Client ). The Client should note that other risks will apply when trading in emerging

More information

Self-funding instalments

Self-funding instalments Course #: Title Course 6 Self-funding instalments Topic 1: Features of self-funding instalments... 3 How SFIs work... 3 How do SFIs differ from ordinary instalments?... 3 Summary... 4 Topic 2: Selecting

More information

CommSeC CFDS: IntroDuCtIon to CommoDItIeS

CommSeC CFDS: IntroDuCtIon to CommoDItIeS CommSec CFDs: Introduction to Commodities We re here to help To find out more, call us on 1300 307 853, from 8am Monday to 6am Saturday, email us at cfds@commsec.com.au or visit our website at commsec.com.au.

More information

Currency Futures trade on the JSE s Currency Derivatives Trading Platform

Currency Futures trade on the JSE s Currency Derivatives Trading Platform Currency Futures trade on the JSE s Currency Derivatives Trading Platform DERIVATIVE MARKET Currency Derivatives Currency Futures www.jse.co.za Johannesburg Stock Exchange Currency Futures & Options trade

More information

Currency Options. www.m-x.ca

Currency Options. www.m-x.ca Currency Options www.m-x.ca Table of Contents Introduction...3 How currencies are quoted in the spot market...4 How currency options work...6 Underlying currency...6 Trading unit...6 Option premiums...6

More information

Earn income from your shares

Earn income from your shares Course 8: Earn income from your shares Module 8 Earn income from your shares Topic 1: Introduction... 3 The call writer's obligation... 4 Topic 2: Why write covered calls?... 6 Income... 6 Example... 6

More information

nabtrade Financial Services Guide

nabtrade Financial Services Guide nabtrade Financial Services Guide Issued by WealthHub Securities Limited ABN 83 089 718 249, AFSL No. 230704 Effective date of issue 09 March 2015 WealthHub Securities Limited ABN 83 089 718 249 AFSL No.

More information

ANZ ETFS PHYSICAL US DOLLAR ETF. (ASX Code: ZUSD)

ANZ ETFS PHYSICAL US DOLLAR ETF. (ASX Code: ZUSD) ANZ ETFS PHYSICAL US DOLLAR ETF (ASX Code: ZUSD) INVESTMENT BUILDING BLOCKS FOR A CHANGING WORLD Introducing a suite of innovative exchange traded funds (ETFs) designed for Australian investors by ANZ

More information

Content. Executive Summary. What is a CFD? Who are the participants? Advantages of trading CFDs. Features and benefits of CFDs. Reasons for using CFDs

Content. Executive Summary. What is a CFD? Who are the participants? Advantages of trading CFDs. Features and benefits of CFDs. Reasons for using CFDs Corporate Retail Contracts and Investment for Difference Banking Content Executive Summary What is a CFD? Who are the participants? Advantages of trading CFDs Features and benefits of CFDs Reasons for

More information

Reference Manual Currency Options

Reference Manual Currency Options Reference Manual Currency Options TMX Group Equities Toronto Stock Exchange TSX Venture Exchange TMX Select Equicom Derivatives Montréal Exchange CDCC Montréal Climate Exchange Fixed Income Shorcan Energy

More information

Participant Guide A guide to becoming an ASX Participant

Participant Guide A guide to becoming an ASX Participant Guide A guide to becoming an ASX ASX. The Australian Exchange ASX Limited (ASX) was created by the merger of the Australian Stock Exchange and the Sydney Futures Exchange in July 2006. The ASX Group is

More information

ASX CFDS PRODUCT DISCLOSURE STATEMENT

ASX CFDS PRODUCT DISCLOSURE STATEMENT ASX CFDS PRODUCT DISCLOSURE STATEMENT YOU ARE WHAT YOU DO Important notes and disclaimers Issued by Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 ( CommSec ) Locked Bag 34 Australia Square

More information

Exchange Traded Funds. Plain Talk Library

Exchange Traded Funds. Plain Talk Library Plain Talk Library Contents What is indexing? 2 ETFs 2 How do ETFs work? 3 ETFs - Fees and Costs 4 How can you invest in ETFs? 6 Participants in the ETF market 9 What are the benefits of ETFs? 10 Risk

More information

Section 1 Important Information... 2. Section 2 Regulatory Guide 227... 2. Section 3 Features... 3. Section 4 How to Trade... 8

Section 1 Important Information... 2. Section 2 Regulatory Guide 227... 2. Section 3 Features... 3. Section 4 How to Trade... 8 CONTENTS Section 1 Important Information... 2 Section 2 Regulatory Guide 227... 2 Section 3 Features... 3 Section 4 How to Trade... 8 Section 5 Significant Risks... 32 Section 6 Costs, Fees & Charges...

More information

How do CFDs work? CFD trading is similar to traditional share dealing, with a few exceptions.

How do CFDs work? CFD trading is similar to traditional share dealing, with a few exceptions. What is a CFD? A CFD is an agreement to exchange the difference between the opening and closing prices of the share, index or commodity between the time at which a contract is opened and the time at which

More information

nabtrade Financial Services Guide

nabtrade Financial Services Guide nabtrade Financial Services Guide Issued by WealthHub Securities Limited ABN 83 089 718 249, AFSL No. 230704 Effective date of issue 10 December 2015 WealthHub Securities Limited ABN 83 089 718 249 AFSL

More information

MARGIN FOREIGN EXCHANGE

MARGIN FOREIGN EXCHANGE PRODUCT DISCLOSURE STATEMENT MARGIN FOREIGN EXCHANGE Halifax Investment Services Limited Australian Financial Services Licence No. 225973 Date 20th October 2014 HALIFAX Product Disclosure Statement 1 IMPORTANT

More information

An Introduction to trading CitiFirst Australian Index MINIs OPPORTUNITY. www.citifirst.com.au/minis

An Introduction to trading CitiFirst Australian Index MINIs OPPORTUNITY. www.citifirst.com.au/minis OPPORTUNITY www.citifirst.com.au/minis MINIS INSTALMENTS SELF FUNDING INSTALMENTS TURBOS TRADING WARRANTS An Introduction to trading CitiFirst Australian Index MINIs For more information and to subscribe

More information

9 Questions Every Australian Investor Should Ask Before Investing in an Exchange Traded Fund (ETF)

9 Questions Every Australian Investor Should Ask Before Investing in an Exchange Traded Fund (ETF) SPDR ETFs 9 Questions Every Australian Investor Should Ask Before Investing in an Exchange Traded Fund (ETF) 1. What is an ETF? 2. What kinds of ETFs are available? 3. How do ETFs differ from other investment

More information

Module 8 Currency ETFs

Module 8 Currency ETFs Module 8 Currency ETFs Course #: Title Topic 1: Currency ETFs... 3 I want exposure to currencies... 3 What is an exchange rate?... 3 Currency ETFs track exchange rate movements... 3 How are exchange rates

More information

Product Disclosure Statement

Product Disclosure Statement Product Disclosure Statement BT Wholesale Core Global Share Fund Issued 24 July 2015 Contents 1 About BT Investment Management (Fund Services) Limited 2 How the BT Wholesale Core Global Share Fund works

More information

Whitehaven Equity Income Fund

Whitehaven Equity Income Fund Whitehaven Equity Income Fund ARSN: 166 733 133 Product Disclosure Statement Dated 6 January 2014 Whitehaven Private Portfolios Ltd Investment Manager and Responsible Entity ABN 64 109 808 577; AFSL 300878

More information

ASB Securities Sharetrading Services. You choose how you want to invest

ASB Securities Sharetrading Services. You choose how you want to invest ASB Securities Sharetrading Services You choose how you want to invest 2 Contents 01 Benefit from dealing with one of New Zealand s leading sharetrading and investment firms. 02 Assist you to meet all

More information

FINANCIAL SERVICES GUIDE.

FINANCIAL SERVICES GUIDE. FINANCIAL SERVICES GUIDE. ABOUT THIS FINANCIAL SERVICES GUIDE. This Financial Services Guide (FSG) is for users of the directshares service, who have opened a directshares account on or after 11 September

More information

Obligatory transactions on a specified date at a predetermined price

Obligatory transactions on a specified date at a predetermined price Obligatory transactions on a specified date at a predetermined price DERIVATIVE MARKET Bond Derivatives Bond Futures www.jse.co.za Johannesburg Stock Exchange A bond future is a contractual obligation

More information

Futures Supplementary Product Disclosure Statement

Futures Supplementary Product Disclosure Statement Futures Supplementary Product Disclosure Statement Issued by Macquarie Equities Limited (ABN 41 002 574 923 Australian Financial Services Licence No. 237504) Date of issue 27 June 2014 Macquarie Private

More information

Taxation treatment of exchange traded futures

Taxation treatment of exchange traded futures Taxation treatment of exchange traded futures 20 May 2010 Alison Noble, Principal, Deloitte Touche Tohmatsu Ltd Christopher Neil, Analyst, Deloitte Touche Tohmatsu Ltd The views in this document are those

More information

PRODUCT DISCLOSURE STATEMENT COMMSEC CFDS

PRODUCT DISCLOSURE STATEMENT COMMSEC CFDS PRODUCT DISCLOSURE STATEMENT COMMSEC CFDS We re here to help To find out more, call us on 1300 307 853, from 8am Monday to 6am Saturday, email us at cfds@commsec.com.au or visit our website at commsec.com.au.

More information

UBS Wealth Management Financial Services Guide

UBS Wealth Management Financial Services Guide Financial Services Guide Australia Ltd ABN 50 005 311 937 AFS Licence No. 231127 UBS Securities Australia Ltd ABN 62 008 586 481 AFS Licence No. 231098 UBS AG, Australia Branch ARBN 088 129 613 AFS Licence

More information

Futures Contract Introduction

Futures Contract Introduction Futures Contract Introduction 1 The first futures exchange market was the Dojima Rice exchange in Japan in the 1730s, to meet the needs of samurai who being paid in rice and after a series of bad harvests

More information

POLICY STATEMENT Q-22

POLICY STATEMENT Q-22 POLICY STATEMENT Q-22 DISCLOSURE DOCUMENT FOR COMMODITY FUTURES CONTRACTS, FOR OPTIONS TRADED ON A RECOGNIZED MARKET AND FOR EXCHANGE-TRADED COMMODITY FUTURES OPTIONS 1. In the case of commodity futures

More information

Everything You Need to Know About CFDs

Everything You Need to Know About CFDs Everything You Need to Know About CFDs Contracts for Difference, or CFDs, have been used for more than 20 years, but did not become popular with retail traders until after 2000. Essentially, a CFD is a

More information

GLS MINIS MINIS INSTALMENTS SELF FUNDING INSTALMENTS TURBOS TRADING WARRANTS

GLS MINIS MINIS INSTALMENTS SELF FUNDING INSTALMENTS TURBOS TRADING WARRANTS OPPORTUNITY www.citifirst.com.au/minis GLS MINIS MINIS INSTALMENTS SELF FUNDING INSTALMENTS TURBOS TRADING WARRANTS An Introduction to trading CitiFirst GSL MINIs For more information and to subscribe

More information