Trading options in Australia

[Seqman]

Hi all . I have just joined the forum. I have been trading on and off for a couple of years just mainly doing Calls and Puts on the US market through optionsXpress. Work commitments seem to get in the way of spending more time than I would like to trading and learning. I recently decided that I wanted to get back to being more active and doing more and in particular Vertical spreads, cash secured puts and covered calls as a start. So, I thought I would try trading in the Aussie market being home and the like, so I opened and account and got approval from ANZ Share trading to trade advanced options but the platform is so hard to work after using OX I can’t even find the chains. Wondering what anyone else does and is it even worth trading options in Oz as it seems thus far very limited.

 

[Warriortrader]

Welcome...
Trading Aussie Stock Options is a pain...almost no liquidity and the local brokers charge you astronomical commissions...
OptionsXpress is ok to do what you want to do...CC, Puts and Spreads...
Good Luck

 

[Virge666]

ASX,

You have a couple of options but IB will be the best of the bunch.

$1 a side for contracts + $2-6 for a share trade.

Software aint bad but it isnt options based. Options are sort of an afterthought.

 

[Sonny S H Tan]

I am planning to migrate to Australia. I now trade Options using Interactive Brokers, OptionXpress and TD Ameritade. After making some enquiries, I am told the fdollowing:-
(1) TD Ameritrade (ThinkOrSwim) is no longer operating in Australia
(2) Interative Brokers do not provide margin for Australian Residents due to Australian Regulations
(3) OptionsXpress is still available in Australia. Can anyone confirm whether they provide margin?

 

[Sonny S H Tan]

I am planning to migrate to Australia. I now trade Options using Interactive Brokers, OptionXpress and TD Ameritade. After making some enquiries, I am told the fdollowing:-
(1) TD Ameritrade (ThinkOrSwim) is no longer operating in Australia
(2) Interative Brokers do not provide margin for Australian Residents due to Australian Regulations
(3) OptionsXpress is still available in Australia. Can anyone confirm whether they provide margin?

I am interested in trading options in the US market. Does anyone know of any regulatory restrictions?

 

[Warriortrader]

OptionsXpress offfers you margin as does IB. With IB you need to have a business account...

 

[Sonny S H Tan]

OptionsXpress offfers you margin as does IB. With IB you need to have a business account...

For OX can you get margin for Individual Australian Resident?

 

[Warriortrader]

Yes, I had an OX account with margin....I closed my account with them in early 2026

 

[Sonny S H Tan]

Yes, I had an OX account with margin....I closed my account with them in early 2026

Thanks Warriortrader. You mean 2016? You don't mind me asking, "Why close OX?" Is there a better alternative. Thanks in advance.

 

[Warriortrader]

Hi..sorry, I did mean 2016....apologies. My reason for closing OX was purely commercial...I was getting better commissions elsewhere, but the difference in platforms was negligible!! For Option Traders, OX is really poor...pity

 

[Sharkman]

I still trade ASX options regularly, around 150-200 trades a year, though I'm guessing a lot of people here have given up on them due to the ugly spreads and stuff like TOS pulling up stumps, IB no longer offering margin etc. And they're probably right, the spreads have gotten worse over the last few years, so the bulk of my trades these days are cash covered puts and covered calls. Less spreads to cross and since it's only one leg (which I usually let run to expiry and deal with the assignment if I have to) I can just walk away if they don't give me a good fill.

Vertical/calendar spreads have become very annoying to do in the last 2-3 years. What I've often found is that while I'll get a fill close to the mid for the long gamma leg (which I always do first), when I try to put the short gamma leg on afterwards, it's very hard to get a good fill, I end up having to cross most of the spread to get it. I could almost swear the MMs have reprogrammed their bots recently to that end, I get the feeling that the bot is now scanning the recent filled orders across the whole option chain, and when it thinks an open order is someone trying to execute the second leg of a strategy, it goes into scrooge mode and refuses to give a decent fill to that order.

I trade thru IB using a company trust so I still have access to margin. Commissions aren't a problem at all. 30c per contract for trading, 27.5c per contract for exercise/assignment. Definitely don't use one of the big banks' brokerages if you're going to do ASX options though, you will get ripped off.

 

[traderjo]

I trade thru IB using a company trust so I still have access to margin. [/QUOTE]
Hi Sharkman, could you please elaborate, do you mean you have Australian Company or US registered Company which allows you to have IB's Margin facility? also what you mean by "Company Trust" is it a company or a trust?..
Mr Tan
TOS: correct but would TOS let you trade if opening an a/c under the name of a US company ?
IB: No margin a/c and does not allow FX trading or US CFDs either for Australian residents!
OE: allows all but my info is old please check latest

 

[Sharkman]

I trade thru IB using a company trust so I still have access to margin.

Hi Sharkman, could you please elaborate, do you mean you have Australian Company or US registered Company which allows you to have IB's Margin facility? also what you mean by "Company Trust" is it a company or a trust?..
Mr Tan
TOS: correct but would TOS let you trade if opening an a/c under the name of a US company ?
IB: No margin a/c and does not allow FX trading or US CFDs either for Australian residents!
OE: allows all but my info is old please check latest[/QUOTE]

Company is trustee of the trust. I control the company. So my IB account is registered as <company name> as trustee for <trust name>, therefore it still gets allowed to use margin. I'm not sure if they allow margin for an individual as trustee for a trust. Even with a company trust account, IB still won't let me do any FX (that restriction applies to all Aust IB accounts), but I never did that much FX anyway so it doesn't really bother me.

You should definitely speak to an accountant before you set stuff like this up, as this sort of thing definitely depends on personal circumstances. What works for me might not work for you!

 

[KingJim007]

Most discouraging to start options trading in Aus
So best option is to use US platform and go through all the tax and accounting headaches?

 

[Value Collector]

Most discouraging to start options trading in Aus
So best option is to use US platform and go through all the tax and accounting headaches?

What did you find discouraging?

 

[KingJim007]

What did you find discouraging?

Well don't get me wrong there is still some good info in this thread and I thank the posters for their info. Just reading around and it seems many people believe that post GFC that options trading in Oz has become more difficult, worse spreads, some issues with fills with some advanced trades, issues with some brokers leaving the market, expensive fees eating into trades. I'm sure with some experience Options trading in Oz can get some good results, it just seems a bit easier with larger markets like US but that has it's own issues around trading as a company and tax and accounting issues.

Overall I am still positive about options, still on the learning curve and appreciating all the info from experienced traders!

 

[Value Collector]

Well don't get me wrong there is still some good info in this thread and I thank the posters for their info. Just reading around and it seems many people believe that post GFC that options trading in Oz has become more difficult, worse spreads, some issues with fills with some advanced trades, issues with some brokers leaving the market, expensive fees eating into trades. I'm sure with some experience Options trading in Oz can get some good results, it just seems a bit easier with larger markets like US but that has it's own issues around trading as a company and tax and accounting issues.

Overall I am still positive about options, still on the learning curve and appreciating all the info from experienced traders!

I haven’t ever traded USA options, so I don’t really know anything about the benefits of that market vs the Aussie market.

But I have been using Aussie options as an extension of my regular longterm value investing Operation and it’s become a pretty decent profit centre of my portfolio.

I think if your underlying strategy is sound, there is no real pitfalls I can see in the Aussie market.

however I am running a pretty simplistic strategy that’s bolted onto my long term buy and hold operation, and am only an options seller, so it may be different if you are a buyer of options or doing more fancy things that are to complicated for my monkey brain.

 

[Sharkman]

Well don't get me wrong there is still some good info in this thread and I thank the posters for their info. Just reading around and it seems many people believe that post GFC that options trading in Oz has become more difficult, worse spreads, some issues with fills with some advanced trades, issues with some brokers leaving the market, expensive fees eating into trades. I'm sure with some experience Options trading in Oz can get some good results, it just seems a bit easier with larger markets like US but that has it's own issues around trading as a company and tax and accounting issues.

Overall I am still positive about options, still on the learning curve and appreciating all the info from experienced traders!

it has become slightly more difficult, but not excessively so if considering solely options over the top 20.

the spreads being shown to the market do seem to have grown wider over the last few years, but often that's not an issue. you don't hit the bid or offer and cross the whole spread every trade, that's a sure way to ruin when trading ASX options.

don't be put off by a wide spread - start by chucking in an order on your side of the spread. it probably won't get filled, but i often do it anyway, as on very rare occasions in the past (i would say probably about 1% of the time), i have managed to squeeze a few hundred extra bucks of premium out of someone willing to cross to my side of the spread. but to save time you might want to just start at the mid.

then every few seconds, you push your order one tick towards their side of the spread until you get filled. if you don't get filled at a decent level (my rule of thumb is 2 ticks their side of the mid, sometimes i vary this depending on how badly i want a fill, but that's up to the individual trader), then you take the order off, walk away and try again later. there's no cancellation fee in Aust, you can freely do this as many times as you like.

if you do this on front month near the money options on the top 20, there's a very good chance you will get filled within 2 ticks of the mid, unless there are extraordinary market circumstances in effect at the time (Brexit, US elections etc). it becomes less likely as you get further away from ATM and with longer and longer expiries.

for eg. if i get filled at 0.75 (and 0.75 represents an IV that i'm satisfied more or less represents the risk i'm taking on), i don't care if the spread that was shown to the market was 0.50/1.00 or 0.74/0.76. makes no difference to me once i've been filled. i suspect at least part of the reason the MM shows wide spreads is to try and trap people desperate for a fill and/or people who are unaware that you can work the spread as described above.

fees are not an issue with IB - it's still 30c per contract, minimum $2. the more significant issue is that unlike what i wrote above a couple of years ago, Aust traders no longer have access to margin with the forced migration from IB LLC to IB Aust. i find that, more than the spreads or the fees, is what's crimping my option trading, as i can no longer dip into margin to execute my sell naked puts - take assignment - sell covered calls - take assignment - rinse and repeat strategy. i have to either cash collateralise, or roll/close out the naked puts at expiry instead of taking the assignment.

 

[Sharkman]

I haven’t ever traded USA options, so I don’t really know anything about the benefits of that market vs the Aussie market.

neither have i, but i have done a bit of research into it in the past, and may dabble in it once i'm retired. from what i saw, there are some obvious benefits of the US options market.

the big one is that the spreads are really good, i mean really really good vs Aust options. on underlyings that are very dollar expensive compared to the largest caps we have in Aust, i was seeing spreads like 3.02/3.04. our closest equivalent is probably CSL, where you will typically face spreads like 2.70/3.50. liquidity is probably much better in the US as well.

i know i wrote above that spreads often aren't too much of an issue as you can still get close to the mid even on a large spread, but that doesn't happen all the time, and derivatives over different underlyings often exhibit different characteristics. in particular i have had lots of trouble getting decent fills for CSL options in the past, if CSL had 3.02/3.04 spreads, i'd just hit the offer to get it done immediately and move on.

in the US, 1 contract is typically over 100 units of underlying, as it is here. however, the underlyings tend to be a lot more expensive over there. what's the difference between 100 units of a $1000 stock vs 10000 units of a $10 stock? there isn't much if trading the stocks themselves, but when it comes to options trading, there is a small but noticeable difference.

firstly, IB charges commissions based on how many contracts you trade, so with expensive underlyings you don't need as many contracts for the same exposure, keeping your commissions down.

the second difference is somewhat obscure, but over the years of trading Aust options, i've had this happen to me several times. i'd be trying to get a fill on say 100 NAB contracts, then someone comes along and takes out 2 or 3 of my order, then the market moves and i have to move my bid/offer in a bit for the remaining 97 or 98 contracts. that creates another order, meaning i have to pay extra brokerage on the 2 or 3 contracts, and it results in multiple parcels, making record keeping more of a hassle. whereas in the US, even 1 contract on a dollar expensive stock is a decent sized chunk of exposure. i imagine that would help prevent this sort of thing from happening. notably - this never happened to me before they changed the lot size from 1000 to 100 back in 2011 (although i was doing smaller trades back then, so that could've had something to do with it as well).

 

[wayneL]

IME if flogging calls on your holdings or cash covered puts as part of a buy and hold strategy, Oz options are fine... That's how I'm playing it ATM, pretty much exactly like @Sharkman.

But be aware that Oz registered traders (market makers) are some of the most cunning and ruthless traders on the planet. If your strategy involves trading out of spreads and whatnot, like sometimes when you really *need to, you will be rorted like never before.