In detail

Exchange Traded Options offer you the potential to profit from share price movements (both rises and falls) without holding the underlying shares.

ETO's:

• Can be bought or sold through your accredited advisor.
• Give you the right, but not the obligation, to buy or sell an underlying share at a specific price (exercise price) on or a before a specific date (expiry date).
• Allow you to exercise your option (purchase or sell the underlying share) on or before the expiry date.
• Allow you to generate income by short-selling or writing options against your existing shares.

Why use it?

Exchange Traded Options provide the following benefits:

• Profit from your view about the future direction of a share.
• Generate income from selling or writing options against your existing shares.
• Insure against a fall in a particular share price.

Things to consider

Could be considered by:

• Higher risk investors looking for greater potential returns over shorter terms.
Investors looking to profit from share price movements without having to own the underlying shares.
• Investors who are looking to insure their current share holdings against potential losses.
• Investors who want to generate income from their existing shares.

Risks Associated With Options Trading

When used correctly, options can provide higher returns in a lower risk environment than holding the shares outright. If you are comfortable increasing your risk on specific holdings in order to increase returns, ETOs may be an appropriate trading tool for you.

Both the purchase and sale of ETOs involve an element of risk. Transactions should only be entered into by investors who understand the nature and extent of their rights, obligations and risks.

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