The Community team of electronic trading major IG today provided some useful information to those traders wondering whether they can trade share options with IG.
Yes, IG’s clients can trade a range of share options with the broker. Select popular stocks are available to trade on IG’s web platform, and the full range is available to trade by phone. IG is testing online trading for share options, and to start off with it is offering Tesla shares (weekly and monthly expiries).
Over the coming weeks, the broker hopes to expand this offering, depending on client demand.
Clients of IG can trade weekly and monthly share options in its web platform. Rather than finding them in the options flyout, each has their own watchlist. For example, a client would trade Tesla from the ‘Tesla Options’ watchlist:
Share options are contracts that enable trading on the price movement of an underlying stock. Traders can use share options to take a view on whether they think a stock’s price will be above or below a certain level – the strike price – at the option’s expiry.
Normally, buying a share option would give traders the right to buy or sell a share at the strike on expiry. However, when trading share options with uIG, rather than trading an option directly, traders are trading a CFD on an option’s price.
All this means is that, instead of having the right to buy or sell shares at a certain price, one’s positions will be cash-settled on expiry.
Dealing hours for share options are as follows:
- UK share options: 08:00–16:30 (London time);
- American share options: 14:30–21:00 (London time);
- European shares: Market hours for the relevant exchange;
- Australian share options: 10:00-15:55 (Sydney time).
IG charges a spread depending on where the shares a client is trading originate:
- 5c on US shares;
- 3p on UK shares;
- 3c on European shares.
Traders can find the full details in the ‘share options’ tab of IG’s fees and charges.
Speaking of IG’s offering, let’s note that the company has recently announced its plans to expand its lineup of extended-hours stocks. From 3pm (UK time) on January 4, 2021, IG will add the following stocks to its All Session US shares offering:
- NIO Inc – ADR;
- Peloton Interactive Inc;
- Zoom Video Communications Inc;
- Beyond Meat Inc;
- Airbnb Inc.