CFD providers with UK/US stock options

[rhmt01]

Hi

Just wondering if anyone has used igmarkets or others for options trades?

I had a quick chat to IG markets about trading - asking them to provide me quotes of Rio Tinto PLC.

For Rio Tinto plc 2740p they gave me 29.5/34.5 with no commission.

The margin for the sold option is no more than the margin for the underlying and can be up to 50% of that margin for far OTM (10% in the case of Rio Tinto - of the share that is).

I'm going to have a nice chat tommorrow with IG's melbourne office.

I'm a bit wary of CFDs for shares, as they just feel like 'knock out' ITM call/put warrants with interest charged every night. (knock out meaning once it goes OTM it expires worthless - especially the case for guaranteed stop loss.)

Anyone with experiences to share?

 

[wayneL]

Let me get this straight! IG markets are offering options on stocks, or CFD's?

What happens in cases of assignment/expiry? What is the right over, stocks, or CFD's?

 

[rhmt01]

options over individual stocks with strike prices & spots mimicing the option.

cash settlement on expiry with no threat of early exercise for the seller. they don't explain much (not they really have an idea though from my discussion) - they are just offering options at bid/ask of the underlying - but just like normal cfd's - theres no point bidding midpoint etc.

from my discussions with them they have turned all the american style options on stock into european style, since their exercise methodology on stock is the the same as the index.

I might chuck in a few dollars to see what is going on... especially if you can write naked at 10% of the underlying - and since its cfd's - they just close out when you have no margin left. From what I hear the US want alot of margins for naked writing.

So it probably acts like an option on a single stock future - even when no future for the underlying exists.

 

[rhmt01]

options over individual stocks with strike prices & spots mimicing the option.

I mean Strikes Prices and Expiries equivalent to ETOs.

 

[rhmt01]

OK had a chat to igmarkets and opened an account.

not only are their the normal ETOs, theres some wierd stuff out there.

Daily (on commodity and indexes) and Weekly Options (on currencies) and the normal run of the mill Monthly Options for indexes and stocks.