Trade options online with Sanford

Sanford Securities have established a derivatives trading section of their website that allows you to trade Exchange Traded Options (ETO's) over the internet. While other online brokers may allow you to trade options, their service is generally restricted to placing orders by phone.

The Sanford service also lets you write call option contracts (covered calls) against stock that you own. Writing call options against stock that you own gives investors an additional revenue stream (option premium ) while limiting the upside on the stock to the exercise price.

Infochoice has received a number of questions relating to the ability to write covered calls against margined stock. The Options Clearing House has recently permitted the use of a margin lending portfolio as security against writing options, however, margin lenders have not yet been able to accommodate this service.

Before trading options investors need to read and understand the ‘ASX Understanding Options booklet' and should take an ASX options course before taking the plunge into this sophisticated market.

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