Share Options
We offer Share Options on a wide range of shares.
Our Share Options are a special form of CFD, which give a client exposure to changes in option prices but cannot be exercised by or against the client, and thus cannot result in delivery of actual shares.
Wide range
As long as there is a tradable option in the underlying, we trade all options on shares in the FTSE® 100, the DOW 30, the S&P 500, the Nasdaq 100 and some large cap Canadian and Australian stocks, as well as on a large selection of European options traded on Eurex or Euronext.
Standard commission charge
We charge a standard commission per lot, per side, on USD, EUR, CHF, GBP, CAD and AUD shares. There is no commission charge on expiry of a share option, but the standard commission will be charged for opening and closing positions. The charge is automatically applied to your account.
Example: Buying a Call Option
When buying an option your risk is limited to the option's premium, but there is the potential for healthy profits.
Opening the position
It is 15 April 2008 and BP shares are trading in the market at 553p. You believe the price will rise and ask us for a quote. IG Markets' BP June 580 Call is trading at 10.5/12.5 and you buy one lot (worth £10 in this instance, though lot values vary from stock to stock) at 12.5, the offer price.
This means that if the share price is above 592.5p (580 + 12.5) on the expiry in June you will make a profit. Your maximum loss on the contract is 12.5p per share, or £125. You will also have to consider our standard commission charge on Share Options. In the case of UK shares, this is £10 per lot, per side.
Closing the position
Over the following month the price of BP does rise, largely on the back of increasing crude oil prices, and by 22 May, the underlying price for BP is 656p. The price of the BP June 580 Call has now risen to 78.75/82.75 and you decide to sell at 78.75, the bid price.
Calculating the result
Your profit is calculated as follows:
Profit on trade
| Closing level | 78.75p |
| Opening level | 12.5p |
| Difference | 66.25p |
Profit on trade: 66.25 x £10 = £662.50
To calculate the overall result on the transaction you would also have to take into account the commission you have paid.
It is important to note that our Share Options are off-exchange contracts that cannot be exercised. You can, of course, close a position in a Share Option on our quotation at any time before expiry; positions not closed in this way are automatically cash-settled on expiry.
Remember that CFDs are a leveraged product and can result in losses that exceed your initial deposit. Trading CFDs may not be suitable for everyone, so please ensure that you fully understand the risks involved.