Index options give you exposure to the securities comprising a sharemarket index. They offer you similar flexibility to that provided by options over individual stocks, while allowing you to trade a view on the market as a whole, or on the market sector covered by the particular index.

While the value of a share option varies according to movements in the value of the underlying shares, an index option varies according to movements in the underlying index. Last trading day Trading will cease at 12 noon on expiry Thursday.

This means trading will continue after the settlement price has been determined. Premium Expressed in points Strike price Expressed in points Index multiplier A specified number of dollars per point e. The settlement amount is based on the opening prices of the stocks in the underlying index on the morning of the maturity date.

As the stocks in the relevant index open, the first traded price of each stock is recorded. Once all stocks in the index have opened, an index calculation the Opening Price Index Calculation OPIC is made using these opening prices. Find out more about SPI Index Options. Find out more about index strategies.

The ASX Group's activities span primary and secondary market services, including capital formation and hedging, trading and price discovery Australian Securities Exchange central counter party risk transfer ASX Clearing Corporation ; and securities settlement for both the equities and fixed income markets ASX Settlement Corporation.

ASX SPI Index Options - ASX

Skip to content googletag. Index options are cash settled. Index options are European in exercise style. This means the holder can only exercise an index option on the expiry day. The strike price and premium of an index option are expressed in points. A multiplier is then applied to give a dollar figure. Index options are cash settled The settlement amount is based on the opening prices of the stocks in the underlying index on the morning of the maturity date.

Options are currently available over the following ASX indices: Investing in index options approximates trading a share portfolio that tracks that particular index.

By using options over an index, you can trade a view on the general direction of the market with just one trade. For example, if you are bullish on the market, you could buy a call option over an index. This gives you exposure to the broader market which the index represents, without having to choose a particular stock.

ANZ Share Investing | Online Share Trading | Options

Leverage - index options, like ordinary options, provide leveraged profit opportunities. When the market rises or falls , percentage gains or losses are greater than rises or falls in the underlying index.

Protection for a share portfolio - when you buy shares you are exposed to two types of risk: Company risk - the risk that the specific companies you have bought into will underperform.

Index options - ASX

Market risk - the risk that the whole market underperforms, including your shares. You can protect your shares against market risk by buying an index put option.

If your bearish market view proves correct, the profits on your put option will at least partly compensate you for the loss of value in the stocks in your portfolio. Low trading costs - since the amount of capital outlaid in an option trade is usually much lower than that involved in a share transaction providing similar market exposure, brokerage costs are often lower in option trades.

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Follow us on Twitter Visit us on LinkedIn Subscribe on YouTube. Cash settled based on the opening prices of the stocks in the underlying index on the morning of the last trading date. Trading will cease at 12 noon on expiry Thursday.