What are some useful Options strategies?
Depending on your view of market movements, Exchange Trade Options (ETO) are a versatile financial tool that you can use to:
- Protect your portfolio
- Profit from market movements even when the market is falling or flat
- Earn extra income from your shares
- Increase your returns through leverage
- Diversify your portfolio
Some useful strategies to consider when investing in Options include:
Long Call
Lock in a future price to buy shares.
Long Put
Lock in a future price to sell shares.
Protective Puts (Long Put + existing stock)
Hedge your existing share holdings against a fall in value and provide protection in times of market uncertainty.
Covered Calls (Short Call + existing stock)
Generate additional income on your existing share holdings in a market that is relatively flat, but risk selling your shares at the strike price if the market moves against you.
Buy-Write strategy (Short Call + Stock)
Buy shares and write covered calls against the shares to generate income to reduce the purchase price at the same time, but risk selling your shares at the strike price if the market moves against you.
View more Options strategies.
We're here to help
Learn more about trading Exchange Traded Options with CommSec. Alternatively, contact the CommSec Options Desk on 1800 245 698 (8am to 5:30pm, Monday to Friday, Sydney time).
Important information
ETOs can involve considerable risk. For that reason, you should only trade ETOs if you understand the nature of the product (especially your rights and obligations) and the extent of the risks you are exposed to.
