# Do you think the ASX Options contracts will ever be 100?



## chreen (3 January 2008)

Will there be a time soon when our ETO contract size will be 100 instead of 1000. I would really like to get involved in selling puts/calls in RIO but not when one contract is for 1000 shares. I dont have too many spare 130,000's.


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## Mofra (3 January 2008)

*Re: Do you think the ASX Options contracts will ever be 100*

chreen, if you start involving spreads in your derivitives positions you will  protect you positions to a max loss to avoid black swan events & reduce the amount of collatoral you need to provide for net credit trades.

Although I doubt a move to a smaller contract size is due soon, I'm sure ACH would still charge the per contract fee on the smaller amount, so they'd possibly be in a better position fees wise to do so


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## builder2818 (9 February 2011)

*Re: Do you think the ASX Options contracts will ever be 100*

Bumping this old thread as I heard today that ASX ETO's will be reduced to 100 contracts starting from May 2nd and progressively rolled out over the following ten days proceeding. There will be no change however on index options.


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## cutz (10 February 2011)

*Re: Do you think the ASX Options contracts will ever be 100*



builder2818 said:


> Bumping this old thread as I heard today that ASX ETO's will be reduced to 100 contracts starting from May 2nd and progressively rolled out over the following ten days proceeding. There will be no change however on index options.




I hope not, that will mean more fees, 

Have you got a link ?


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## NeuromanceR (10 February 2011)

*Re: Do you think the ASX Options contracts will ever be 100*



cutz said:


> I hope not, that will mean more fees,
> 
> Have you got a link ?




"As a result of the reduction in contract size, the headline standard ETO fee will be changed
from $1.30 per contract to $0.13 per contract excluding GST."

"Exercise fees will be lowered from $0.50 to $0.05 per contract excluding GST."


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## cutz (10 February 2011)

Thanks for the details NeuromanceR


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## village idiot (10 February 2011)

thanks  for posting the info

although the ASX may have done the righty will IAB follow suit? if not the cost of 2 contracts just went from $6 to $60 which would be prohibitive


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## So_Cynical (10 February 2011)

So can we assume that the average cost of ASX ETO's will fall by 90% or so?

Cos i would love to write some covered calls on some of my stocks if brokerage etc fell significantly, down to around normal brokerage even would be good.


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## Tysonboss1 (11 February 2011)

So_Cynical said:


> So can we assume that the average cost of ASX ETO's will fall by 90% or so?
> 
> Cos i would love to write some covered calls on some of my stocks if brokerage etc fell significantly, down to around normal brokerage even would be good.




No, the price is going to be the same pound for pound.

All that is happening is that instead of the contract size being 1000 shares it is dropping to 100 shares, and the fee per contract is dropping from 1.30 to 13c.


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## sails (11 February 2011)

Will be interesting to see if brokers drop their fees to one tenth as the exchange is doing.

And wonder if they will drop their minimums...


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## NeuromanceR (11 February 2011)

Tysonboss1 said:


> No, the price is going to be the same pound for pound.
> 
> All that is happening is that instead of the contract size being 1000 shares it is dropping to 100 shares, and the fee per contract is dropping from 1.30 to 13c.




Exactly. I was just quoting the ASXC fees that need to be paid on top of brokerage.
It may look cheaper, but it's not.

And I doubt brokerage fees will change.
In fact, they'll probably find a reason to increase them!


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## sails (21 April 2011)

Looks like ASX is changing contract size to 100 and which is to phased in during May.  Will be interesting to see if brokers will drop brokerage to one tenth. 

http://www.asx.com.au/resources/why-small-packages-are-best.htm


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## builder2818 (22 April 2011)

sails said:


> Looks like ASX is changing contract size to 100 and which is to phased in during May.  Will be interesting to see if brokers will drop brokerage to one tenth.
> 
> http://www.asx.com.au/resources/why-small-packages-are-best.htm




This was mentioned months ago in this thread.

One of Commsec's options desk ("call centre trader") lackie told me they were dropping fees to 1/10th of their current $34.95 per trade fees for each contract.  If fees didn't drop, what would be the incentive for people trading one or two contracts when the brokerage would cost more then the premium - if you wrote an option you would be paying for it out of your account instead of the premium.


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## sails (22 April 2011)

builder2818 said:


> This was mentioned months ago in this thread.....




Yes, I am aware - but received an email from the ASX yesterday, I thought it helpful to bump this thread to remind others of the change in contract size which is to be implemented in about 10 days.

I only trade with IB now and haven't seen any information as to their brokerage policy on the change of Aussie contract size.


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## ROE (22 April 2011)

comsec already email their clients regarding the change over

More information here

http://www.comsec.com.au/public/news.aspx?id=1186


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## itakacs (23 April 2011)

ROE said:


> comsec already email their clients regarding the change over
> ....




ok, so what it is going to mean for small investors apart from being able to spend less on the option contract itself?

CommSec charges $34.95 up to $10,000 in premium. Can we expect that they realize contract/100 shares for $34.95 brokerage fee will not be very attractive for their customers?

Anyway, I got the same email from CommSec, but only about the ASX announcement. I'd be more excited to hear about their fee reduction...


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## ROE (26 April 2011)

itakacs said:


> ok, so what it is going to mean for small investors apart from being able to spend less on the option contract itself?
> 
> CommSec charges $34.95 up to $10,000 in premium. Can we expect that they realize contract/100 shares for $34.95 brokerage fee will not be very attractive for their customers?
> 
> Anyway, I got the same email from CommSec, but only about the ASX announcement. I'd be more excited to hear about their fee reduction...




I found it ridiculous to get  1 options contract at 100 shares, dont think anyone stupid enough to do it...fees will eat all your premium or bring up your premium... what this give you is a more precise control

say I write a naked put on 1700 QBE shares and I got enough cash for 1700 shares sit there waiting...right now I can either do 1000 or 2000 at a time
with the new rule I can do 17 contracts instead of either 1 or 2 contracts.


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## RandR (19 August 2011)

ROE said:


> I found it ridiculous to get  1 options contract at 100 shares, dont think anyone stupid enough to do it...fees will eat all your premium or bring up your premium... what this give you is a more precise control
> 
> say I write a naked put on 1700 QBE shares and I got enough cash for 1700 shares sit there waiting...right now I can either do 1000 or 2000 at a time
> with the new rule I can do 17 contracts instead of either 1 or 2 contracts.




Im curious if anyone knows of a broker that has dropped there brokerage rate for 1 options contract of 100 shares so that it is actually reasonable to utilize.. Im using comsec atm and there options brokerage does not make it at all feasable for me to utilize call options on my 'relatively' small parcels of shares.

Which broker currently has the cheapest options brokerage rates for small numbers of contracts ? Or is there no hope and should I just wait until my share parcels/capital is larger ?


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## cutz (21 August 2011)

RandR said:


> Which broker currently has the cheapest options brokerage rates for small numbers of contracts ?




Interactive Brokers.


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