FAQ

Should you choose options with about a month remaining because that is when most of the decay is?

Question: If you short options, should you choose options with about a month remaining because that is when most of the decay is? Response: Shorting (or writing) options is a strategy used to generate income through receiving a premium for selling the right either to buy or sell an option. The premium the option writer…

How should I set up my margin lending account to protect against losses while the markets are so volatile?

Question: How should I set up my margin lending account to protect against losses while the markets are so volatile? Response: It is important to maintain a well diversified portfolio to weather any falls in the market , most importantly, the portfolio needs to be also diversified against different sectors in the market. This is…

If I sell all my shares but one, can I be included in any future share purchase plans or offers etc?

Question: Was wondering your opinion regarding when selling shares and having the intention of selling all shares in a particular stock, to sell all but one, therefore being included in any future share purchase plans or offers etc? Response: There are both pros and cons with the above strategy. The minimum marketable parcel in any…

What is a spot forex rollover?

When you trade spot forex you are trading a pair of currencies, you buy a set amount of one currency and sell the equivalent amount of the other currency. This contract requires one currency to be exchanged for the other and delivered in two business days. When people are speculating in the retail spot FX…

What do I need to take into consideration if I short the ASX200?

Question: Hi, with the market going down shorting the ASX200 or other indexes must be a popular move. What do I need to take into consideration if I do this, and are there any strategies I can employ when shorting the index? Response: Since the global financial crisis, short selling has grown in popularity with…

How can I invest in commodities via ETFs?

Question: How can I invest in commodities via ETFs? What are the options and what are the risks involved? Response: Investors can gain exposure to commodities via ETFs in two ways – either via ETFs which track the price of a particular commodity such as gold or through ETFs which track the performance of the…

Why would I buy an ETF rather than a managed fund? What are the advantages of ETFs?

By Drew Corbett, Head of Investment Strategy and Distribution of BetaShares There are some major differences and advantages of ETFs over managed funds which investors should be aware of. The primary differences are summarised in the table below: #FOTO:1012:600# Expanding on these characteristics: Risk Diversification – ETFs usually provide all the diversification benefits of traditional…

What would be the difference/advantage of buying as opposed to selling an option?

Question: I understand that you buy a call when you think that the market is going up, and you buy a put when you think it is going down. Does it mean the reverse when you sell a call and when you sell a put, ie sell call when trending down and sell put when…

Can I remove the initial cash or sell the shares and still have the margin loan sitting there?

Question: Can anyone answer my question regarding the initial cash or shares required as security for the establishment of a margin loan: Once the loan is established and becomes like a flexible line of credit, can I remove the initial cash or sell the initial share security and still have the margin loan sitting there?…

How does the course of sales work?

Question: With course of sales I notice there are lots of trades for single shares sometimes a whole stream of them one after the other. What’s going on? Why bother selling one share at a time? Response: The course of sales is a chronological record of all trades which have taken place for a particular…