Options or CFDs for going short on the ASX?

[It's Snake Pliskin]

I am sick of my cfd provider not allowing shorts on the stocks I select.

I think my option is to go to options.
Is this the thing to do or change CFD providers?
Discussion please.
Options pros and cons on the ASX.

 

[Lachlan6]

Re: Options or CFD's for going short on the ASX

Which stocks won't it allow you to go short on? Should only be very few if considering top200.

 

[It's Snake Pliskin]

Re: Options or CFD's for going short on the ASX

Which stocks won't it allow you to go short on? Should only be very few if considering top200.

WBC tried tday.
MBL always

 

[CanOz]

Re: Options or CFD's for going short on the ASX

WBC tried tday.
MBL always

I've had similar problems too, not lately though. They claimed that thier broker would not lend them the stock to short.

Both MBL and WBC are on my IG Markets shortable list, but the thing is you don't know until you try the trade....that can be frustrating.

I'll be watching the discussion on options as i'm a complete dummy on them.

Cheers,

 

[wayneL]

Re: Options or CFD's for going short on the ASX

Options are not a straight directional bet, you have the greeks, volatility to consider. This is fine if you want to do it this way, but not fine if you don't want to make those considerations.

Sounds to me (and I have no real knowledge of this) like you just need to change CFD providers.

 

[barney]

Re: Options or CFD's for going short on the ASX

WBC tried tday.
MBL always

Howdy Snake, Both those are shortable through IG Markets, and IG has better rates for smaller transactions (under $10,000 sp amount), which makes pyramiding easier. Cheers.

PS How was the holiday?

 

[Lachlan6]

Re: Options or CFD's for going short on the ASX

Gday Snake. Very strange you cant short these two HUGE companies. FP Markets is very good in that regard, I have never had problems shorting anything, very straightforward. It may be a difference between DMA and Market maker. If so (IG is Market maker?) then it would seem to me that DMA is defeninently the only way to go unless you want CMC Markets with very competitive margins.

 

[Dutchy3]

Re: Options or CFD's for going short on the ASX

Hi Snake

I use CMC and have not had an issue taking a short ...

Options ... are not for me ... I like may financing and holding costs to be flat and predictable. Options are too much of a club and not enough of a market for me

 

[CanOz]

Re: Options or CFD's for going short on the ASX

Gday Snake. Very strange you cant short these two HUGE companies. FP Markets is very good in that regard, I have never had problems shorting anything, very straightforward. It may be a difference between DMA and Market maker. If so (IG is Market maker?) then it would seem to me that DMA is defeninently the only way to go unless you want CMC Markets with very competitive margins.

IG is DMA on ASX stocks.

 

[It's Snake Pliskin]

Re: Options or CFD's for going short on the ASX

Thanks for your responses.

I am with Macquarie - direct access.

Options on the ASX. Are options worth using on smaller markets like the ASX?

 

[reece55]

Re: Options or CFD's for going short on the ASX

Thanks for your responses.

I am with Macquarie - direct access.

Options on the ASX. Are options worth using on smaller markets like the ASX?

Snake
I don't trade often (maybe 1 contract a month and usually don't put too much on the table), but in my experience Australia is ok to trade, as long as you are trading the bigger stocks. So, I usually trade say BHP, WPL, ZFX, MBL, NCM and RIO. These tend to have fair distance spreads. Most others are just an excuse for the market maker to rape you on the spread.......

Just my view though, someone else trading oppies a little more may have further insight. But any of the above are certainly liquid and have decent spreads.

Cheers

 

[happytrader]

Re: Options or CFD's for going short on the ASX

Hi Snake

I trade WBC options regularly and haven't had any trouble finding a market. Just some basic points to remember.

Make sure you have open interest of a least a couple of hundred contracts and make sure you know your time frame.

Buy at or slightly out of the money contracts with at least 6 weeks till expiry if you are planning on a fast move. Just look at the previous months options if you want to see what yours will be worth if you were to hold them.

By identifying a time of low volatility you will be able to enter close to your offer or a least halfway inbetween.

The option market opens around 10.20am has a lunch break and closes around 4.15pm.

Cheers
Happytrader

I am not a licensed financial advisor or a representative of a financial advisor and am merely expressing my opinions.

 

[It's Snake Pliskin]

Re: Options or CFD's for going short on the ASX

Hi Snake

I trade WBC options regularly and haven't had any trouble finding a market. Just some basic points to remember.

Make sure you have open interest of a least a couple of hundred contracts and make sure you know your time frame.

Buy at or slightly out of the money contracts with at least 6 weeks till expiry if you are planning on a fast move. Just look at the previous months options if you want to see what yours will be worth if you were to hold them.

By identifying a time of low volatility you will be able to enter close to your offer or a least halfway inbetween.

The option market opens around 10.20am has a lunch break and closes around 4.15pm.

Cheers
Happytrader

I am not a licensed financial advisor or a representative of a financial advisor and am merely expressing my opinions.

Happytrader,

Thanks for the information.
It is something I am going to look into. I understand the basic concept of options but not the inner workings or actual usage. It shall be interesting to study.
Cheers
Snake