Writing call options gives you the potential to earn additional income from the investments in your portfolio.
When you write a call option on shares in your portfolio, you’re selling the right – but not the obligation – to buy those shares at a specified price within an agreed timeframe. In return, you’re paid a guaranteed premium.
The agreed selling price of the shares (known as the exercise or strike price) is available to the buyer, should they proceed, up until the agreed expiry date. If the share price remains around the same as or slightly lower than the selling price on or before the expiry date, the buyer is unlikely to exercise their right to buy your shares. This means you keep your shares while still earning income from the call options premium – income that can be used to help pay loan interest, reduce your loan balance or be re-invested.
However, if the share price is higher than the selling price on or before the expiry date, the buyer is likely to exercise their right to buy your shares. This means you sell your shares at a lower price than the market price.
Your adviser can advise you on the benefits and risks of using a call options strategy in your margin loan account.
Options accounts can be linked to a Margin Lending facility by obtaining the services of any of the following approved stockbrokers for options trading.
If you wish to use the services of another broker for options trading please contact the Account Management Team on 1300 150 266 or contact us to request the broker be included on the approved list.
- Baker Young Stockbrokers Limited
- Ballieu Holst
- Bell Potter Securities Limited
- Berndale Capital Securities Limited
- Burrell Stockbroking Pty Limited
- Citigroup Wealth Management
- CMC Markets Stockbroking Ltd
- Evans & Partners Pty Ltd
- Halifax Investment Services Limited
- Macquarie Equities Limited
- Morgans Limited
- Morrison Securities Pty Limited
- Ord Minnett Limited
- Patersons Securities Limited
- Sentinel Stockbroking
- Shadforths Limited
- Shaw and Partners
- Wilsons Advisory and Stockbroking Limited