Ways to Use ASX Options as a Strategic Investment

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Trading ASX options as a strategic investment (investment made with the aim of generating safe, consistent returns), is very important for traders. Options trading in Australia provides traders excellent strategies that help boost their profits, decrease costs and extend trading approach. Even though many investors are reluctant of using ASX options, it is crucial to understand that these financial derivatives are no more or less risky than any other form of trading. ASX options are excellent financial derivatives that, when used safely, can be very beneficial to your portfolio. Another good thing about ASX options that most people do not realise is that they are short-term trading derivatives, and so it requires significantly less technical analysis than ordinary stock trading. Nevertheless, it is necessary to have some technical analysis skills for trading options as it can help predict the market movement and movement’s magnitude.Ways to Use ASX Options as a Strategic Investment

Here is how you can use ASX options as a strategic investment:

Recover some of the cost of your share market investment

If you already own some shares, you can slowly recover the cost of the shares by selling call options against them every month. This strategy is called covered call writing. Covered calls Australia are effective, and over a year, it is possible to write (sell) covered calls several times that you can in the course of time pay off everything you invested in the shares. Because you will already be having enough information about your shares, the technical analysis for covered calls Australia will not be complex.

Buy stock for half price

Buying deep in the money (DITM) options for a short term momentum trading is an excellent way to buy stocks at half the price. If you see possible growth of the stock over the next couple of months, you can rip the benefit from the strong delta of the option and purchase the rights to it at a substantially reduced premium.

Get paid to buy stocks

If you have a certain stock in mind that you would like to own, buy do not want to buy it at a higher market price, then the strategy of selling naked put options may prove to be useful. Every month, you sell put options against a stock, but at a strike price or exercise price that is lower than the price at which the stock is currently trading. In case the price of stock goes up, your put expires worthless, and you retain the money. If the price drops to your set price, you can buy it and wait to bag profit as the stock recoups back up. Once you have bought the stock, you can sell covered calls to further reduce the price you paid for it.

Profit from unstable markets

Do not sit idle in a volatile market. Look at the chances presented in such a market. Options strategies such as buying strangles or straddles, selling credit spreads, dealing in butterflies, etc. can yield excellent profit in a volatile market.

Selling the future

Using the credit spread strategy is an excellent way to make a steady profit of about 10% per month. Identify the market trend, and sell credit spreads every month to build your portfolio.

Options trading in Australia can be risky, but with the right approach or with a good ASX options advice, risks can be minimised and profit can be made. Today, a range of options trading strategies is available through which traders can yield excellent returns in almost any market condition. If you want to gain more insight on different ASX options strategies, including covered calls Australia, butterflies, and others, expert advisors at Total Options can help. Get in touch with them at www.totaloptions.com.au

The Lucrative Options Trading Strategy

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There are different ASX options trading strategies available today, but which one should you choose in order to yield a decent profit? If you search on the internet and go through different investing forums, you will find plenty of options trading opinions that can confuse even the moderate investors. Some investors employ academic approach and analyse profitability and risk from that perspective, while others employ a more adaptable approach. One thing is for sure, however — the main reason why investors prefer options trading is that they want to earn better profits than they can through any other stock trading strategy. With the crazy swings of the Australian Share Market over the past few years, most traders and investors have started to realize the absurdity of simple strategies like “buy and hold”, and have been looking for reliable, profit-generating trading tactics.The Lucrative Options Trading Strategy

Is options trading lucrative?

Some investing forums will give you an impression that options trading in Australia is dangerous and risky. The fact is, any sort of trading is risky, but look at the magnitude of profit that options trading in Australia offers. In contrast to any other investment option, options trading yields exceptional returns. With a very small capital, you have the leverage to control big blocks of share, through which you can reap excellent profits whenever the market moves in the right direction. The disadvantage is that the same leverage also has the capability to erase your portfolio if the options trading strategy you are using does not address certain risk factors. Therefore, the answer to the simple question above is, yes. Trading option in Australia is lucrative, but in some circumstances, it can also be risky.

Is there any options trading strategy that can yield consistent profits?

Novice traders are often introduced to the simple ideas of buying call and put options. While this strategy is easy to understand and put to work, the truth is, in order to make it successful, you need to gain some skills for technical analysis that allow you to predict at least the direction and magnitude of the market swing. This simple strategy indeed provides the greatest potential for a huge profit, but in reality, such potential is not regularly achieved. Therefore, while the simple “buying call and put options” method has an excellent potential for a good profit, it is challenging to attain such potential on a regular basis.

Selling put options

Studies have shown that the most excellent options trading strategy, which can yield excellent profit on a consistent basis, involve not buying call options, but selling put options. Selling put options or selling credit spreads (suitable for those with lower margin limits), had proved to be more lucrative over the long run than any other options trading strategy. While the magnitude of profit is small than other options trading strategies, the consistency of making profit makes it the best strategy. Another excellent advantage of this strategy is that the technical analysis necessities for selling put options or credit spreads is not as tough as that required for other options trading strategies. The risks associated with this strategy are also less. With a solid trading plan, which includes an exit strategy, selling put options can yield more profit with less risk than any other trading strategy.

If you want to venture into ASX options trading, you will need study and understand different strategies and then develop a robust plan that can help yield consistent profit and at the same time minimise your risk. At Total Options, we provide Australian option education that can help you understand how options trading in Australia works. We even provide excellent ASX options advice that can help you yield consistent good returns with minimised risks. In order to know more about Total Options, visit www.totaloptions.com.au

Covered Calls Australia – An Excellent Strategy That Every Investor Can Use

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Every day, transactions of billions of dollars happen on the Australian Securities Exchange (ASX). Some of thCovered Calls Australia – An Excellent Strategy That Every Investor Can Useese transactions are made by big financial institutions while other transactions are made by well-known insurance companies. One of the techniques used by the gurus of Australian share market to generate consistent income is writing (selling) covered calls. Writing covered calls is a simple technique, which is eminent among institutional traders, but a mysterious one to the novice or self-directed investor despite being lucrative and even deemed “easy” by ASX itself. In other words, you do not need to be a share market genius in order to learn and try writing covered call.

Most investors probably invest in share market in order to yield consistent monthly income from their portfolios. Instead of investing in popular mutual funds or purchasing and holding certain stocks hoping for a rise in their value, why not devote some proportion of your account writing covered calls every month? The versatility of covered calls Australia can generate consistent monthly income for any investor with a trading account. In order to generate consistent monthly income with covered calls writing, however, obtaining the proper options trading education is vital.

Here is how covered call options trading in Australia works:

If an investor has 1000 shares of Telstra stock at A$ 5.00 per share and is ready to sell those for a profit, that investor can sell or give away the right to someone to buy their shares at A$ 6.00 per share. In the terms of covered calls Australia, the investor would be selling the right (with obligation excluded) to someone to purchase their Telstra shares at the A$ 6.00 strike price. The income that the investor gets from selling the rights to someone is called premium. In our case, the premium for writing a thirty-day option is A$ 1.00 per share.

Like any other investment strategy, there is a downside to writing covered call options. If Telstra shares should rise to A$ 9.00, in the above case the investor would be obligated to give away or sell their shares at A$ 6.00. If Telstra shares never cross A$ 6.00 until the date when the option expires, the investor is eligible to keep their shares as well as premium income. The key to successful covered calls Australia trade is to know which particular stocks to hold for writing covered calls and which ones to invest in for the long period.

For quite some time now, writing covered calls in Australian share market has been a top technique used by professional investors to generate guaranteed monthly income. You too, no matter if you are a novice, can try writing covered call option in order to create steady monthly income. With covered calls Australia, risk is low, and income is consistent.

To know more about covered calls Australia, contact the vastly experienced options trading experts at Total Options www.totaloptions.com.au. They can give you deep insight on covered calls and can also provide excellent Australian share market advice.

Options Trading – The Best Way to Earn Excellent Returns

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Investing a portion of your salary is a sensible thing to do. While it is tantalizing to spend all your earnings in buying new things, take a rational decision to save money. Everything is unstable in this day and age, and saving some money can prove to be your one of the wisest moves. Once you have gathered a considerable amount of money through savings, you can turn your focus on using that money to earn some healthy returns. Yes, it is possible to earn excellent returns from money you made through saving. How? The safest way is by making careful investment in ASX options trading. Options trading in Australia has a number of benefits.

Options Trading – The Best Way to Earn Excellent ReturnsOne notable benefit of options trading in Australia is that you can invest in it with a small capital. As a matter of fact, most investors favour to invest in ASX options only because of their requirement of small capital, low risk, and good returns. As an investor, you can garner excellent profits by purchasing shares below market price and selling (writing) them above market price.

Another big advantage of ASX options is that unlike other types of assets, they offer excellent flexibility to investors. Whether the share price goes down, up or sideway, with proper ASX options advice, investors can cover their portfolio or book profit.

With ASX options, you can also build and spread out your portfolio. By spreading out or diversifying the portfolio, investors will be able to buy and sell shares, as well as be able to hedge against market uncertainties. Just like any other investment, there are some risks associated with options trading. With a good ASX options advice to create sensible options trading strategies, however, the risks that associate with options can be minimised.

Find an experienced options trading advisor with the help of the internet. Professional advisors, through their various income strategies, can help maximise your profits. They have ample knowledge and understanding about the Australian share market. They can help you solve your issues or answer questions about your investment. Finally, by teaming up with an experienced ASX advisor, you will be able to eliminate the speculation with taking investment decisions.

As for your part, you should absorb yourself in different resources relating to this form of investment as well as strategies such as collars options and covered calls that you can exercise in your favour. Once you are familiarised, confident, and have selected a proper trading strategy, you have to try to keep yourself at the top of the game by staying in sync with the current market developments. Try to invest on your own with the help of useful online resources and literatures. Alternatively, you can opt for Australia option education, which can give you deep insight about securities.

Whether you want to invest in ASX options by first gaining insight on them or simply with the help of an expert ASX options advice, the professionals at Total Options can help. Total Options is a collaboration of vastly experienced ASX advisors. They provide excellent advice on a range of ASX options trading strategies. In addition to professional advice, the professional at Total Options also provide ASX options education that gives investors a valuable knowledge on options trading in Australia.

Visit their website www.totaloptions.com.au to know more about them.

What is The Most Consistent, Profitable Options Trading Strategy?

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Out of various options trading strategies that are available on ASX, how do you decide which one will yield good returns? When you explore various investing forums, you will find numerous different opinions; it only makes thing hard to find out the right trading strategy. Some experts employ a rigid academic approach in order to analyse risk and profitability while others soWhat is The Most Consistent, Profitable Options Trading Strategy?rt to a more flexible approach. One fact, however, remains—the primary reason these investors utilise options is because they want to earn healthy returns which ordinary stock trading strategy cannot yield. With the strange gyration of the Australian stock market in the last few years, many investors have started to understand the ineffectiveness of strategies like “buy and hold”, and have been searching for more conservative, profitable trading strategies.

Is Options Trading in Australia Profitable?

Many investing forums will have you believe that options are highly risky and dangerous. The fact is that for the sheer scale of profit, ASX options trading cannot be beaten. The magnitude of the potential gain offered by ASX options is enormous. For a small amount of investment, you have the ability to control large blocks of stock, and can garner excellent profits from a move in the favourable direction. The downside is that options also have the ability to wreak your portfolio, if you are employing a trading strategy that does not address the risks of the particular strategy. In short, the simple answer to the above question is yes; options trading in Australia can be profitable, but it can be risky as well in some situations.

Is there a consistently profitable strategy for trading options?

Most traders new to options trading are simply introduced to the concepts of buying calls or puts. While these concepts are easy to understand and implement, the fact is that, in order to be successful with options trading, you should have excellent technical analysis skills that allow you to calculate the direction as well as magnitude of any market moves. This options strategy indeed the largest potential for profit, but the fact is that such potential is often not achieved. From one single large loss, it often requires several good trades to recover. Therefore, while the buying calls and puts strategy has the greatest potential for profit, it is difficult to achieve that potential on a frequent or consistent basis.

Selling strategies

As per our experience, the most profitable options strategy involves not buying, but selling options. Selling puts or credit spreads is more profitable over the long term than any other approach. The magnitude of the profit is less than other strategies, but consistency of profit is possible with this strategy. The notable advantage of this strategy is that the analysis requirements for selling credit spreads or selling puts is not as rigid as the requirements for other strategies. The degree of risk is also comparatively lower at every level. With an excellent trading plan, which also includes a nice exit strategy, selling options can be less risky and more profitable than most stock trading strategies.

If you are thinking about options trading in Australia, you will need to understand different strategies and create a sturdy trading plan in order to yield excellent profits with minimised risks. Partner with us to learn how to do this. Follow the link in order to contact us http://totaloptions.com.au/

Important Criteria for Selecting the Best Stocks on Which to Write Covered Calls

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Writing covered call is one of the most popular strategies that many expert traders as well as traders new to options trading use to generate income. The strategy is popular for two reasons:

  1. It is a conservative strategy
  2. It is easy to understand and trade

For those who are unfamiliar with the covered call strategy, it works in the following manner. For every 100 shares of a particular stock that you already own, you can sell someone the right (no obligation) to buy those shares from you at a certain fixed price (strike price) before an expiration date. The amount that you get from writing (selling) the call is called premium.

At the expiration, if the stock ends up above the strike price, you will be obligated to give away your shares at the agreed price. If the stock ends up below the strike price, the option expires as worthless, and you will be able to retain the ownership of your stock, which you can again use to write the covered calls.

While covered call writing is a straightforward option strategy, it does not mean it is easy to make excellent returns consistently. The strategy has two major risks:

-          When the price of the underlying stock takes a big leap, you will miss out on gains above your strike price because the buyer will exercise the option and you will have to sell at a price, which is below market price.

-          When the value of the underlying stock falls substantially, the loss from holding your stock will probably exceed the gain from the premium income.

Because of such risks, it is crucial to select a proper trade plan. Randomly selecting stocks on which to write covered calls or selecting certain stocks simply because they have high premium will probably lead to failure.

Here are two important criteria for selecting the best stocks on which to write covered calls:

Important Criteria for Selecting the Best Stocks on Which to Write Covered CallsSelect stocks with good technical. There is no need for you to become a technical analyst in order to be successful with covered call strategy, but knowing the basics of technical analysis is helpful. If you are going to be making short-term trades, it is essential to have some kind of basic understanding of technical analysis or access to some tools and resources, which can help you to determine the short to intermediate term technical health of a stock. By knowing the technical health of a stock, you can also determine its covered call suitability.

Select stocks with realistic premiums. If you are going to be writing covered calls for income, you will want to pick stocks (technically healthy) with a good amount of premium so that it be worth your while. Good premium does not mean high premium, but realistic premium. Options with very high amount of premium are dangerous ones. They have high volatility and uncertainty. No matter how big returns they yield, these types of stocks are not fit for reliably successful covered call strategies.

Covered calls strategy can be an excellent resource to generate income. However, just because it is easy to understand and to trade does not mean it is easy to execute on a consistent basis. Fortunately, there are various resources available that can help improve your covered call returns; for instance, the experienced advisers at Total Options. Covered calls Australia advisors at Total Options have the skills as well as vast experience that help them give you excellent advices that can improve the performance and returns on your covered calls. Know more about them by visiting their website http://totaloptions.com.au/

How to Play Safe with Options Trading in Australia

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Even though ASX option trading in Australia is commonly used financial product these days, it can be complex and highly risky in nature. On the other hand, good option trading strategies have the potential to make investing safer. ASX options are perhaps the most flexible trading securities out there and are also exceptional and versatile products, which investors, both novice and expert, can use to scale down risk and beef up profits.

How to Play Safe with Options Trading in Australia

Hazards with Options Trading

Greed – It is the biggest threat, which is entirely human in origin and is not inherently associated with options trading. Many people begin to invest in ASX options simply because they see huge profit in them and dream of “getting rich quickly.” Of course, there are huge profits and chances of getting rich quickly with options trading, but right trading strategies are essential for that. Unfortunately, sentiments of greed often tempt people to forsake trading strategies and begin gambling.

Trading on Margin – Selling ASX options entails providing a margin, just in case if a trade becomes a loser. Oftentimes, this margin condition does not equal the total cost that an investor has to bear should his or her trade gets trashed (which can happen pretty swiftly). This could without doubt, leave the investor in debt to his or her broker.

Loss of Investment Capital –For investors who have invested in shares and stocks, a slump in the market can set them back a small percentage, which usually is below 10% (unless if the market crashes seriously). During options trading, despite trading significantly smaller amounts of money, it is possible to lose 100% of the amount that the investors have put into the trade.

How to Play Safe with Options Trading

Adhere to a Trading Plan – First create a good trading plan through study and research, and hone it by practicing using a stock market simulator (paper trading). During paper trading, make sure that you have traded for a number of times so that you are able to experience several trades going against you—it is the best way that helps you discover how to read the signs of danger. Finally, adhere to your trading plan.

Proper Technical Analysis – Over analysis often results in a bad trade. The fundamentals for technical analysis for options trading in Australia can be different from those of stocks. Additionally, each options trading strategy features its own set of analysis techniques. Once you have opted for a good strategy, find out exactly which kind of analysis is called for, and stick with that.

Moderate Capital Allocation – Do not over allocate your capital. Most ASX options advisors advise that you do not commit anything in excess of 2% of your funds to any trade. Adhering to this advice makes it possible to take in a number of losses while still able to retain some trading power. If you write (sell) options, it is wise to leave about 15-20% of your funds readily available. It will allow you to “buy” yourself out of a bad trade just before it becomes a substantial margin liability.

Options trading in Australia offers a number of rewards that a wise investor can exploit. At the least, they offer investors an easy way of lowering the buying price of a share, or of hedging against loss. Options are often a source of secure, consistent revenue. Before diving into options trading, find out about various strategies, ensure to implement the proper technical analysis, and do not be inspired by greed.

If you want expert ASX options advice or want to learn about options trading in Australia, get in touch with experienced and professional advisors at Total Options.

How Covered Calls are Beneficial

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How Covered Calls are Beneficial

Writing covered calls can be an excellent strategy to increase investment income. It is a conservative option trading strategy whereby investors write (sell) call options against the holding of the underlying shares. Using the covered calls strategy, the investors get to earn a premium by writing (selling) calls. At the same time, they also get to enjoy all the benefits of underlying share ownership, such as voting rights and dividends. To understand how a covered call is beneficial, look at the following scenarios.

Before looking at the scenarios, let us first set up a situation.

The Situation

Suppose the shares of ABC Company are trading at $15. So you purchased 500 ABC shares for $7,500 ($15 x 500). Now you decide to employ a covered call strategy. So by employing a covered call strategy, you sell someone the right to purchase your ABC shares for $15.50 for the few days for a premium of $1. This means that you are selling a call (1 call equals 100 shares) with a strike price of $15.50 and a premium of $1. Your transaction and cash flow will be:

Your Transaction

Your Cash Flow

You buy 500 shares of ABC for $15

- $7,500

You sell 5 calls (each for 100 shares) of ABC at $15.50 for $1 premium

+ $500

 So your initial investment is $7,000 ($7,500 – $500).

Now let us look at the different scenarios that could happen at the call expiration day.

Scenario 1

At the expiration day, the share remains unchanged at $15. Your calls will expire worthless because why should anybody buy the shares for $15.50 if they are available in the market for $15. Now your transaction and cash flow will be:

Your Transaction

Your Cash Flow

You purchased the 500 shares of ABC for $15

- $7,500

You kept the premium of 500 shares (500 x $1)

+ $500

You sell 500 shares of ABC for $15 (expire day value)

+ $7,500

 So at the end, you still made $500. How? Well, your initial investment was $7,000 ($7,500 for 500 shares less $500 premium on covered calls) and you sold your investment for $7,500 (500 shares x $15 (share price at expiration date)).  That gives you a profit of $500 on your initial investment or say, just over 7% return. This was just without any stock movement. Let us look at scenario 2 where the share price increases.

Scenario 2

At the expiration day, the share price increased to $16. You are being “called” from the owner of the options you sold—you are obliged to sell your ABC shares at 15.50 (your strike price). Ok, now let us again look at the return:

Your Transaction

Your Cash Flow

You purchased the 500 shares of ABC for $15

- $7,500

You kept the premium of 500 shares (500 x $1)

+ $500

You sell 500 shares of ABC for $15.50 (expire day value)

+ $7,750

This results in a profit of $750…your initial purchase price $7,000 (premium included) minus sales price $7,750. It is almost 10.7% return on investment.

What if the share price drops? Well, let us look at scenario 3 for that.

Scenario 3

At the expiration day, the share price dropped to $14.50 So now your return will look like:

Your Transaction

Your Cash Flow

You purchased the 500 shares of ABC for $15

- $7,500

You kept the premium of 500 shares (500 x $1)

+ $500

You sell 500 shares of ABC for $14.50 (expire day value)

+ $7,250

 Adding up the above figures, you still make $250 profit, even though the price of your shares dropped. You will keep on making profit as long as the share price remains above $14.

Looking at the above three scenarios, opting for covered call strategy is not a bad idea at all. Further, if you have an expert covered calls advice, you can substantially increase your investment income. If you want the best covered calls advice in Australia, then get in touch with Total Options. They have a vast experience in options trading in Australia. They can also educate you on how options trading and covered calls work in Australia.

Options Trading in Australia – The Best Way to Earn Healthy Returns

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Who doesn’t want to earn healthy returns? Everyone likes to see his or her money multiply. Opening a savings account and depositing money in it will ensure steady returns, in the form of interest, but it is a slow form of earning returns. Besides, the returns are not too significant. Starting a business, any sort of business, will yield decent returns, but it requires considerable capital to get started. Careful investment in real estate will also yield good returns, but again, it needs huge capital. So what is the best possible way to earn healthy returns without spending a fortune? The answer is quite simple…invest in the options trading in Australia.

Australian Securities Exchange, the ASX, is one of the top-10 exchange groups in the world. Its average daily turnover is comparable to the Deutsche Boerse, London Stock Exchange, and New York Stock Exchange. It offers a variety of trading products and services, including shares, futures, warrants, and several others that would surely help earn healthy returns. Each of these products and services has their own pros and cons, but pros of one specific product, the “ASX Option,” easily outweigh its cons. Let us look at the pros of this particular ASX product.

First thing to note is that option trading does not require big capital. One can begin options trading with low capital. Many seasoned investors invest in options because of their high returns and low risks. These investors can reap excellent profits by buying shares at prices lower than the current market and selling them at prices higher than the current market.

Another benefit of options is that, unlike other ASX products and services, they offer an excellent flexibility to the investors. With a proper ASX options advice, investors can insure their portfolio or book profit irrespective of whether the price of share goes up or goes down.

ASX options also offer a way to build and diversify the portfolio. With portfolio diversification, an investor can yield higher returns with less risk. Speaking of risks, there are some risks associated with options trading. With the expert ASX options advice, however, the risks can be minimised.

For investors without any experience, it is advisable to work with a professional options trading advisor. An advisor, with various strategies, helps maximise profits and at the same time minimise the level of risks. Such a professional has an in-depth understanding about various ASX products and services. An advisor will promptly help answer the queries relating to an investment. By working with an expert advisor, an investor while making an investment decision will at least be able to cut the guesswork.

Investors on their part should also get acquainted with all the available ASX resources relating to options trading and strategies like covered calls and covered calls collar that they can exercise to their advantage. Once familiar, confident, and determined with the right trading strategy, the investors have to try to keep themselves on top of the game by keeping abreast with the current market developments, which could have some impact on the investment. The investors should try investing on their own with the help of useful resources and literature that are available online. If it is too complex to understand, investors can also seek Australia option education through which they can gain an easy understanding about options trading.

Total Options, a collaboration of expert and experienced options advisers in Queensland, can help investors seeking to invest in ASX options trading. They have considerable experience and extensive knowledge of various ASX products and services. Whether it is ASX options advice or Australian share market advice, they ensure that their clients are able to earn healthy returns with minimum risks. Aside from expert advice, options advisors at Total Options also provide Australia option education, which gives investors an excellent insight on options trading.

ASX Options Trading Strategies

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Like any other trading strategy, option trading has its risks, but the risk level can be made low, and it is more lucrative than stock trading. The best thing about options trading is it allows investors to develop a wide variety of strategies with different risk profiles.

ASX Options Trading Strategies

Many people consider option trading a risky strategy, suitable only to speculators; it is not the case though. With the proper approach or the right options trading advice, an investor can generate consistent investment income or provide insurance for his or her share portfolio. Below are some ASX options trading strategies, which may help minimise risk and yield good profits.

  • Selling Credit Spreads: – With minimum efforts, it is possible to grow your portfolio by 10 to 12 percent every month. Simplicity ensures success and, therefore, this strategy is not suitable for overactive traders or those who over analyse everything. All an investor needs to know is how to perform a simple trend analysis of the market, and on the group of certain selected stocks. This credit spread strategy is profitable and it is easy to implement.


  • Selling Covered Calls: – If an investor already owns a stock, then he or she can reduce the cost of that stock effectively by writing (selling) covered calls on that specific stock every month. Besides, if the market is flat or down, selling covered calls may yield excellent investment income. One great thing about covered calls is that a covered call writer retains voting and dividend rights on the underlying stock.


  • Buying and selling “Deep-in-the-money” options: – This is an excellent option trading strategy. It enables investors to buy stocks effectively at about half price and, therefore, double their profit. Because the investors’ trades are all short term, they are not bothered about dividends or other aspects about buying and holding stocks. They, however, do benefit as the price movement of the stock precisely matches the price movement of the option they purchased.


  • Complex strategies: – Various complex strategies, such as collars, butterflies, strangles, and several others can reduce risks and help yield high profit. The only downside of such strategies is that they are all expensive in terms of brokerage fees or the high cost of an option itself.


Selecting the best option trading strategy is easy if the right information is available. While above strategies may seem difficult to understand, especially to the novice investors, they certainly can help generate consistent investment income or at least reduce options trading risks. Alternatively, investors can also team up with professional advisors who can provide an expert ASX options advice. Along with Australian share market advice, professional advisors, like at Total Options, can also provide option education, which helps investors gain deep insight about how option trading in Australia works.

To get in touch with professional option trading advisors at Total Options, just follow this link http://totaloptions.com.au/