This example is based on a monthly Australia 200 put option with a strike price of 3500. We also offer daily options for more short-term positions.
You believe the Australia 200 will fall. Our live quote for June Australia 200 stands at 3680 - 3683, while our quote for a June 3500 put option is 117-124. You decide to 'buy' this option for $10 a point at 124.
One advantage of 'buying' options is that your maximum loss is known in advance. You cannot lose more than 124 x $10 per point, i.e. $1240. Therefore your deposit is $1240.
You are proved right as the Australia 200 begins to drop. Two weeks later our quote for June Australia 200 is 3554 - 3557 and, based on this futures quote, the June 3500 put option is now at 189 - 196. You close your trade at 189.
The result
Profit on deal
| Closing level | 189 |
| Opening level | 124 |
| Difference | 65 |
Profit: 65 x $10 per point = $650