Stock Index Options
We offer a full range of traded options based on leading stock indices, with no commission to pay.
Example: Buying a Put option on FTSE 100
It is 14 May 2008 and he FTSE 100 is at 6200. You think the market is due for a sharp correction and check the quote for our June 6000 Put option. It is 57/71 so you decide to buy 5 contracts at 71. (One contract is the equivalent of US$10 per point.)
To open the position you supply a deposit of 71 points (the opening price) x 5 contracts x US$10 per point = US$3550. This is the most that you could lose on the position if the option expires at zero.
By 9 June 2008, the FTSE falls to 5910, and you decide to close your position. Our quote for the June 6000 Put is now 130.5/144.5, so you close out by selling 5 contracts at 130.5. Your profit on the trade is calculated as follows:
Profit
| Closing level | 130.5 |
| Opening level | 71 |
| Difference | 59.5 |
Profit: 59.9 points x 5 contracts x US$10 per point = US$2975