That is, the stock bought on margin can only be applied against sold calls of the same stock. Options may be exercised on any business day up to and including the Last Trading Day.
Last trading day Trading will cease at 12 noon on expiry Thursday. This means trading will continue after the settlement price has been determined. New option exercise prices created automatically as the underlying futures contract price fluctuates. Last trading day The last day of trading of the underlying futures contract. Margins refunded to seller. The first three characters are the ASX code eg. Usually shares per contract. Monthly Contracts - Thursday before last Friday of the settlement month.
Weekly Contracts - Thursday Both may change due to public holidays. The first three characters are the ASX code e. March, June, September, December up to six quarter months ahead and serial months up to four non-financial quarter months ahead. Index options are cash settled using the opening price index calculation on expiry morning.
Set at intervals of 25 index points. The last day of trading of the underlying futures contract. Options may be exercised on any business day up to and including the Last Trading Day. The traded premium is calculated in points not cents. Please refer to index options.
Yes you can trade Index Options up til 12 noon on Expiry Day. This means trading will continue up til 12 noon after the settlement price has been determined. Company options are issued by companies for the purpose of raising funds. They give shareholders an opportunity to buy new shares at a fixed price on or before a predetermined date. This gives the company the ability to raise funds for future projects. The exercise of company issued options results in an increase in the company's capital.
Exchange traded options are traded over existing shares. Their exercise results in a transfer of ownership of the underlying shares, and not in an increase in the company's capital. The company is not a party to the contracts traded. Early exercise of a call option may occur just before the stock goes ex-dividend, where the dividend the investor would receive, if they were to exercise the call, is greater than the interest expense incurred in buying the shares which are the subject of the option ahead of the expiry date.
Generally this only occurs on the day before the ex-dividend date. For in-the-money calls where the corresponding put option still has some value, the rule used by most of the market is that if the value of the dividend is more than the value of the corresponding put plus interest, then the call should generally be exercised for the dividend.
For more information, refer to Early exercise of options. ASX Clear then randomly assigns that exercise to an account with an open written position in the same Option Series.
The following morning, the broker whose client has that account receives the Notice of Assignment, and advises the client that they have been exercised. Failure to deliver results in fail fees being levied on the client's broker who in turn may pass them onto the client. This trade will be settled 4 days after the date of option exercise. You can exercise an option if American Style at any time up until 7pm on expiry day, regardless of whether the underlying stock is suspended or not.
This obviously is of concern to naked call writers, who then have to make alternative arrangements i. There are times, when on expiry day, ASX will open the Option Market not the underlying stock to trade in the last hour if the underlying stock is suspended, to facilitate closing of positions. What are the trading hours of the options market? Option pricing and margins How do you calculate the dollar value of a premium?
Where do I find quotes on exchange traded options? Do I have to pay margins when I trade options? Trading What is the minimum options order I can place?
What is the difference between an option and a warrant? How can I find a properly qualified broker to give me advice on options trading? Are there any ASX charges involved in trading options? How are options taxed?
Learn more How can I learn more about options? How does covered call writing work? I have heard that I can combine margin lending with writing call options. How does this work? Can I lodge warrants against my option margin? Can I trade options over an index? Can I trade options on expiry day? Is there a booklet that explains option adjustments? What is the difference between a company option and an exchange traded option?
Exercising How likely is it that my written call option will be exercised early? What is the process by which exercise notices are assigned to written option positions? What happens to naked call writers after being exercised against?
What if the underlying stock is suspended? Is it true that most options expire worthless?