Option Trading

[joeshe915]

Hi Omad not heard from you yet. Keen to catchup on skype. Let me know when you might be free. By the way do you know of a way in IB TWS to analyse strategies like Iron Condors and Butterflys? My group in the US use Thinkorswim (ToS) which is brilliant but can't get it in NZ. Looking forward to catching up. Rgd Joe

[omad]

Sorry Joe, had to head to Oz a bit sooner then expected, I'm here for a while but set up now so will be able to chat.

Be easier to talk you through TWS over Skype.

[FarmerHamilton]

I trade on IB TWS as well , probably about 100 trades / month. Short volatility mainly on S&P500 stocks with profits going into long term mega-cap multi-nationals such as JPM,KO,CL and UTX.

Vol is pretty low at present but stocks like FB and AAPL always offer short vol opportunities. Have contemplated going full time but with 3 boys don't want to be up all night trading and knackered during the day.

Current liquidation balance at IB is $150,000 US ... probably enough to generate maybe $600/$700 week in income ( 20% return )

Tempting !!

Also trade UK and HK options market too. HK suits well for time but unfortunately hedging with the underlying stock is difficult as they only trade in lots of 1000 .... 1000 Cheung Kong ( 0001.HK ) is worth NZ$15,000 .... minimum trade volume , yikes !!

[omad]

FarmerHamilton, what's the option liquidity like on the HK market?

[FarmerHamilton]

FarmerHamilton, what's the option liquidity like on the HK market?

On the large cap stocks it is very reasonable all though the bid/offer spreads can be wide so you just sit at your price waiting to get hit/lifted most of the time . A few of the stocks are very liquid with very tight spreads and these are the ones I tend to concentrate on such as

HSBC ( 0005.hk )
Wharf ( 0004.hk )
Bank of Communications ( 3328.hk )
ICBC ( 1398.hk )
Ag Bank of China ( 1288.hk )
Swire Pacific ( 0019.hk )
CNNOC ( 883.hk )

Again profits re-invested in long term holds on stocks such as

HK & China Gas Co ( 0003.hk )
Hysan Development ( 0014.hk )
Hang Seng Bank ( 0011.hk )
Wharf ( 0004.hk )

Brokerage is $20 HK per trade so about US $2.60

[omad]

Thanks, I'll check it out.

[wealthboost]

Hi guys,


Wondering if you can help me...I'm looking to write Options on the US market and have no idea where to start. I traded and wrote options on the Australian market a couple of years ago until my broker closed up, I was using Sanford securities which changed to AusieX.
Ok, I want the ability to write US company Options (& ETF Options) and buy puts/calls if required also...how do I go about it? Which platform should I consider? who can I talk to re: taxation issues?...In a nutshell, what do I need to do to get writing there?
Thanks, you help would be greatly appreciated.

[omad]

Interactive Brokers is your best bet for US options, they are pretty much the cheapest commissions available and their platform is good, TOS has a better platform for option traders but not available in NZ. I think the minimum to open an account is $10k US and you have to jump through a few hoops to get it open but it's worth it.

[joeshe915]

Just to add to what Omad has just written, I went though Halifax. Just go to halifax.com.au and request to open an account. They will set you up with InteractiveBrokers TraderWorkStation (TWS). If you put in $200 initially you can get a paper trading account but you only do live trading with a bigger $amount. TWS initially is not an easy platform to use, but they have (rather long) webinar that go through the basics of using the platform. I just started paper trading initially until I got the hang of it! All the best.

[wealthboost]

Thanks guys, really appreciated...joeshe915, thanks I'll call Halifax to get more info on that. Omad, do you go directly through Interactive?..and if so is how and where would the cash account be setup?..the US don't make it easy for us NZ'ers huh..