Options
We offer a full range of options on individual shares, stock indices, forex, interest rates and commodities. Individual Share Options are only available to trade over the phone, but all our other options contracts are available to trade both telephonically and online.
An option is a type of derivative: a financial instrument which is derived from the price of a different instrument. At IG Markets you are able to trade both types of option, calls and puts:
- A call option is the right to buy a particular market at a specific fixed level on or before a fixed date. For example, the March US SPX500 futures 1250 call is the right to buy March SPX500 futures at 1250 (the 'strike price') on or before a particular day in March.
- A put option is the right to sell a market at a fixed level on or before a fixed date. For example, a September 1.8500 British Pound/$ put is the right to sell the British Pound/$ at 1.8500 on or before a date in September.
Options are offered at a range of different strike prices, and you can make an option trade in either direction. The price of an option is based on the level of the underlying market in relation to the strike price, the time remaining until the option expires and the volatility of the underlying market.
You can trade out of your option position at any time or wait until it expires. Our options CFDs are always cash settled, so physical delivery will never be a concern for you.
Stock Index Options
We offer a full range of traded options based on leading stock indices, including Daily Options and Futures on the FTSE and Wall Street, with no commission to pay.
Forex Options
Ideal for the short-term trader, our Daily Options are available on some of the most popular forex pairs.
Each trading day we offer a full range of Call and Put options on USD/JPY, EUR/USD, GBP/USD, USD/CHF and EUR/GBP. Options expire at 2pm Chicago time based on the spot rate.
As with our standard forex contracts, the quote is 'all-in', so there is no commission to worry about.
Share Options
We offer Share Options on a wide range of shares. Our Share Options are a special form of CFD, which give you exposure to changes in option prices but cannot be exercised by or against you, and thus cannot result in delivery of actual shares.
As long as there is a tradable option in the underlying market, we trade all options on shares in the FTSE 100, the DOW 30, the S&P 500, the Nasdaq 100 and some large cap Canadian and Australian stocks, as well as on a large selection of European options traded on Eurex or Euronext.
We charge a standard commission per lot, per side, on USD, EUR, CHF, GBP, CAD and AUD shares. There is no commission charge on expiry of a share option, but the standard commission will be charged for opening and closing positions. The charge is automatically applied to your account.
It is important to note that our Share Options are off-exchange contracts that cannot be exercised. You can, of course, close a position in a Share Option on our quotation at any time before expiry; positions not closed in this way are automatically cash-settled on expiry.
Whereas most other options can be traded either telephonically or online, individual Share Options can only be traded over the phone.
Volatility trading with Options
Take advantage of volatile markets with options CFDs.
If you believe a market is going to be volatile on a particular day, or over the next few weeks, you can take advantage by using Options to trade on the volatility itself, even if you aren't sure which direction the market is going to move.
So if you expect volatility in the markets you could buy a 'paired' call and put either side of the current market level; if the market breaks in either direction, you'll lose your premium on one side but profit on the other from the potentially unlimited market volatility you predicted.