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Exchange Traded Options
Access broader portfolio diversification with Exchange Traded Options (ETOs).

Reasons to invest in ETOs with nabtrade

Stream live ASX data so you can make real time investment decisions.

Enjoy great brokerage and a competitive high interest rate for your cash.

Enjoy one platform for all your investments.

About Exchange Traded Options

Exchange Traded Options (ETOs) are a derivative security which means their value is derived from another asset, typically a share or (stock market) index.

An ETO gives you the right but not the obligation to buy or sell a given security at a certain price within a given time.  

There are two main types of ETOs: Calls - the right to buy, and Puts - the right to sell.

Trading ETOs is risky and should not be attempted unless you have a sound understanding of their characteristics and the market they operate in.

Pricing

Type of trade Fee or brokerage Amount
Online trading (transaction size) Up to and including $10,000 $34.95
Above $10,001 0.35% of trade value
Over the phone All $49.95 or 0.55% of trade value (whichever is greater)

Benefits

Protection

You can use ETOs to hedge or protect your share portfolio against a drop in value. For example, buying put options over shares allows you to lock in a sale price during the life of the option, regardless of share price movements.

Income

Shareholders can earn income by selling call options over shares they already hold.

Time to decide

If you buy a call option, the purchase price for the underlying share is locked in until the ETO expiry date.

Leverage

The initial outlay for an options contract is less than you would need if you were to invest directly in the underlying shares.

Diversification

Because your initial outlay is lower when you trade options, you can diversify your portfolio and gain broader exposure to a range of shares, or even a market index.
 

Risks

Limited life span

ETOs have a limited life span. Their time value falls as they approach their expiry date, and they’re worth nothing after they expire.

Market movements

ETOs are affected by movements in the underlying share or index. If the market moves against you, your ETOs may fall in price or become worthless at or before their expiry date.

Leverage

The high degree of leverage involved in many ETOs can work against you, multiplying losses if the market moves against you. 

Loss of premium for buyers

If you buy an option and it expires worthless, you’ll lose the premium you paid for the option, plus transaction costs. 

Unlimited loss for Call Writers (sellers)

As the seller of an ETO, you earn a premium. However, it’s important to be aware that you can also incur unlimited losses if the market moves against an uncovered (naked) Call position.

Next steps Get started with nabtrade

Every new nabtrade customer receives:

  • A domestic trading account
  • An international trading account
  • An integrated cash account

Additional service options include:

  • nabtrade High Interest Account
  • nabtrade IRESS Trader/ViewPoint
  • NAB investment lending solutions
  • Self Managed Super Fund setup and management services

Get started today

1. Apply online - Complete our online application form - you can select from an Individual, Joint, Company or SMSF/Trust account.

2. Add cash to your account - watch the tutorial.

3. Start trading

Funding options for ETOs

There are two ways to fund your investment:

Add cash to your account

Every nabtrade account comes with a linked cash account.

Cash management

Borrow to invest

With a NAB Margin Loan you can borrow to invest.

Margin lending