Best online options brokers for Australia?

[long88]

Re: Best online Options Brokers for Aussie?

Spectrum live are using TWS (same as IB), i have the account, but not yet funded it, i guess it would be the same as IB since it is on the same platform.

live data cost like $30/month, and there is minimum 1 trade/month for the acc to be no maintenance free.

i guess i just let you guys know later if i find out more.

Hi, first post just found this forum, very impressed so far.
Try interactive brokers, the cost per trade on the Australian market is $3.00
http://individuals.interactivebrokers.com/en/main.php
I have not opened an account with them yet (you need $10000 ) usd or the equivilent in OZ dollars plus abt $34.00/month for a live data feed. At the moment I pay $45.00 a trade with Austock and $24 a month to weblink for their live feed so costs look pretty good. If you want to trade the US market its $1 usd a trade.
I intend to open an account in the New Year and close my Austock account then.The only negative I have found so far is that they are not covered by the asx ? but are covered up to $30 million for stocks and $1 million for cash in your account see this link
http://www.interactivebrokers.com/en/accounts/accountProtection.php?ib_entity=llc
Hope this helps

 

[investedz]

Re: Best online Options Brokers for Aussie?

Hi guys,

I moved over to Comsec from OptionsXpress. Comsec gave me 2 separate accounts (within the same login). 1 for shares trading and the other for options trading.

For those joining Comsec, watch out for the following common newbie user problem:
When placing an options order, make sure that you have selected your options account (top right corner). I was a victim to this today and missed out on a trade (a good one too). I had placed the options order from my shares account, and the pending orders window was showing that I did not place any order!

Splitting the shares and options accounts may also mean you'd have to place separate orders for and share/options combination you may want to put on, such as covered calls, etc.

There's no ability to place combination orders for options (straddles, spreads, etc). At the moment it seems you would have to place combination trades manually, by buying the different parts of the trade individually. This would mean separate executions and fees for each leg, instead of the bulk execution/fee that Optionsxpress had for these types of trades.

Overall Comsec is not bad. So far my only complaint is usability, but I think today's frustration is a one off.

 

[long88]

Re: Best online Options Brokers for Aussie?

Spectrum live are using TWS (same as IB), i have the account, but not yet funded it, i guess it would be the same as IB since it is on the same platform.

live data cost like $30/month, and there is minimum 1 trade/month for the acc to be no maintenance free.

i guess i just let you guys know later if i find out more.

just an update to this post for those of you who are interested.

i stay with spectrum live now, basically it is trader workstation, with $37.50 for australian data, and free for us live data (minimum trade is $30/us to be free).

brokerage is way more cheaper than etrade, a lot more flexibility than etrade.

the only problem is java, tws is very slow running on my pc, maybe it is time for new computer.

cheers

 

[Beenjammin]

Re: Best online Options Brokers for Aussie?

Hi guys,
There's no ability to place combination orders for options (straddles, spreads, etc). At the moment it seems you would have to place combination trades manually, by buying the different parts of the trade individually. This would mean separate executions and fees for each leg, instead of the bulk execution/fee that Optionsxpress had for these types of trades.

Very good point Investedz! Ive got a big issue at the moment along these lines.......

Im using Comsec to trade options too. The costs REALLY mount up quickly, and Im wondering if anyone knows of another method or broker who can let me do this more cost effectively without having to expose myself to currency risk by going offshore:

Heres a very basic example writing a covered call:

1. Write 1 x $10.00 Calls on XXX at 50C: Cost: $35
2. Brokerage on $10,000 purchase of 1000 XXX shares: $20
4. Option Exercised on expiry at $10.00: 0.35% Allocation Brokerage Cost: $35

TOTAL Revenue $500
TOTAL Cost $90 (or 18% of the revenue from the options sale)

You see how the costs would mount up, especially writing more complex strategies than a simple covered call.

If the purchase of the equity comes out of a margin loan the costs get higher again, plus interest. Costs get marginally better on larger orders, but not much as once you get over a $25K Equity order Comsec goes onto 0.12% purchase brokerage.

So.....is there a more cost effective Australian based alternative (brokerage wise...I'm not interested in writing longer term or higher risk) or is this just another case of "we're in Australia, so we just have to take it"?

Thanks in advance!

 

[storchyman]

Re: Best online Options Brokers for Aussie?

I have found NAB online trading the best platform so far for ease of use and position clarity. But they do not do naked calls.

So use a commsec acccount aswell, not very impressed, mainly reasons already mentioned by other members and more, EG also missed out on highly profitable positions because of the stupid split account feature

I am going to give IB a go, and close the commsh it account

 

[sails]

Re: Best online Options Brokers for Aussie?

If you guys are planning to write options with IB, just make sure you know their rules on assignment. Last time I checked, they give only a 10 minute window of opportunity after the market opens to deal with it unless you have sufficient funds or stock in the account before they start randomly unwinding positions in your account.

Just a heads up...

 

[Beenjammin]

Re: Best online Options Brokers for Aussie?

Just discovered a nasty Gotcha (well new for me anyway)...

If you write naked calls with Comsec, then down the track cover if the stock price rises through purchasing the stock, Comsec wont recognise the newly purchased stock to cover the options margin until it clears at T+3. Margin of course has to be settled daily.

This means at T+3 you need enough cash to cover the purchase of the stock PLUS covering the margin requirements. You get your margin cover back only after the stock has cleared.

Worse, if you happen to need to cover and you get allocated within 3 days, you need the cash to buy the stock AT CURRENT MARKET PRICE, PLUS BEING ABLE TO SETTLE FOR THE STOCK YOU BOUGHT EARLIER TO COVER, PLUS HAVING COMSEC HOLDING YOUR MARGIN. If the timing is just wrong then you can wind up needing a lot of cash and stock locked up "in processing" that is rightfully yours but you can't use as collateral against margin or a margin loan. Nasty, and easy to get caught short.

Anyone use a broker who WILL give credit against share purchases that are locked up in the T+3 settlement period (assuming of course they have your cash sitting their to buy the stock?)

Cheers
B.

 

[cutz]

Re: Best online Options Brokers for Aussie?

Just give the options desk a ring,

BTW, what's your plan if the stock settles back down before expiry therefore not triggering an assignment.

 

[Beenjammin]

Re: Best online Options Brokers for Aussie?

Hi Cuts,

The options desk told me they might grant leniency once only if I did get stuck short on funds due to money tied up in margin etc, but once only.
Its not likely to happen (although the warcry of the market has always been "**** happens!") but in case it does Id like to have an approved facility to get access to the neccessary cash for the one or two days involved. Maybe Ill have to arrange some kind of overdraw facility with the bank....

TO answer your question, I'd set a stop loss if the price eased back and then be prepared to buy in again if it whipsawed up once more.

Cheers
B

 

[cutz]

Re: Best online Options Brokers for Aussie?

Hi Cuts,

The options desk told me they might grant leniency once only if I did get stuck short on funds due to money tied up in margin etc, but once only.
Its not likely to happen (although the warcry of the market has always been "**** happens!") but in case it does Id like to have an approved facility to get access to the neccessary cash for the one or two days involved. Maybe Ill have to arrange some kind of overdraw facility with the bank....

TO answer your question, I'd set a stop loss if the price eased back and then be prepared to buy in again if it whipsawed up once more.

Cheers
B

G’Day

I’m trying to understand your situation. You’ve sold a couple of naked calls so I’m assuming you have provided a portfolio as collateral cover to satisfy the margin requirements, providing the market doesn’t move so fast that you run out of margin, trade plus T3 shouldn’t be a problem. If it’s causing a problem you are probably selling calls with inadequate margin. You can always hedge to reduce margin requirements.

 

[Beenjammin]

Re: Best online Options Brokers for Aussie?

G’Day

I’m trying to understand your situation. You’ve sold a couple of naked calls so I’m assuming you have provided a portfolio as collateral cover to satisfy the margin requirements, providing the market doesn’t move so fast that you run out of margin, trade plus T3 shouldn’t be a problem. If it’s causing a problem you are probably selling calls with inadequate margin. You can always hedge to reduce margin requirements.

Hi Cutz,

First off I really appreciate your repeated feedback here - If by any chance we ever meet ITRW I owe you a couple of beers/wines/bourbons/whatever.

I dont have a portfolio at present, Im holding cash. I still believe the market has further down to go (present slight retracement notwithstanding) hence Im writing naked calls for income.

I guess Im concerned, as you said, about being caught in a fast market and having cash tied up in margin when I need it to pay for stock. I just have to be super attentive to cash management.

CheerS!

 

[long88]

Re: Best online Options Brokers for Aussie?

hi benjamin, i hope you dont get caught on this sudden rising market.

Hi Cutz,

First off I really appreciate your repeated feedback here - If by any chance we ever meet ITRW I owe you a couple of beers/wines/bourbons/whatever.

I dont have a portfolio at present, Im holding cash. I still believe the market has further down to go (present slight retracement notwithstanding) hence Im writing naked calls for income.

I guess Im concerned, as you said, about being caught in a fast market and having cash tied up in margin when I need it to pay for stock. I just have to be super attentive to cash management.

CheerS!

 

[Beenjammin]

Re: Best online Options Brokers for Aussie?

hi benjamin, i hope you dont get caught on this sudden rising market.

Wont last long....bear market rally. It'll drop a lot faster than its risen. We'll see below 3000 before long....

Anyway, thanks for the concern. Didn't get caught out
(This time,anyway.)

 

[cutz]

Re: Best online Options Brokers for Aussie?

Be careful with that mindset Beenjammin,

Sorry about the clique but the market can remain irrational longer than you can remain solvent, with options it’s imperative that the trade is managed to suit the condition of the day.

A trip back to 3000 may happen but it's probably unlikely.

 

[Beenjammin]

Re: Best online Options Brokers for Aussie?

Be careful with that mindset Beenjammin,

Sorry about the clique but the market can remain irrational longer than you can remain solvent, with options it’s imperative that the trade is managed to suit the condition of the day.

A trip back to 3000 may happen but it's probably unlikely.

Thank you, duly noted!

"Probably Unlikely" and I go way back..........

 

[cutz]

Re: Best online Options Brokers for Aussie?

BTW, an unlikely trip down memory lane could be interesting

 

[malcolml]

Re: Best online Options Brokers for Aussie?

Anyone know if Westpac Broking give you any gotchas?

I currently use Westpac Broking for options, as westpac can provide you with a risk graph for trades up to 4 legs.

 

[Grinder]

Re: Best online Options Brokers for Aussie?

Don't know about any gotchas but did meet a guy who is with them, said you can set up multi leg spreads online. Only problem was having to get authorisation from service desk everytime a spread was put on, said it took forever... other than that & the brokerage he had no complaints.

If your with them for the risk graphs, check out

http://www.samoasky.com/

does it all for FREE.

 

[malcolml]

Re: Best online Options Brokers for Aussie?

Don't know about any gotchas but did meet a guy who is with them, said you can set up multi leg spreads online. Only problem was having to get authorisation from service desk everytime a spread was put on, said it took forever... other than that & the brokerage he had no complaints.

Yeah that's true, i called westpac broking once and they told me if you don't have a Westpac Cash Manager account, the only way to trade options with westpac is by phone, i called them before and they said they charge the same rate as online trading.
(accounts from all other banks and westpac saving/daily account are not accepted by westpac for options)

 

[sails]

Re: Best online Options Brokers for Aussie?

Malcolm, another free one is from this site: http://www.hoadley.net/options/strategymodel.htm

I think you can get up to four legs working on the basic, free version. It also has a comparison feature where it will overlay two different strategies which is something I used extensively.