Spreadbetting options advice please?

[NEILM16]

If i was to sell a put or call option using spreadbetting at a premium of say 75 at £5 per point and wasnt happy with the trade would i be able to sell/buy the option back to close the position?Say the value was now 25 on the option what would i get money wise would i get 25 * £5 ie £125 less the option price?

 

[Airthrey Capital]

If you sold an option (whether a put or a call) for a premium of 75 at £5 per point, and you buy the option back at a premium of 25(to close) at £5 per point you would make a profit of £250 (£5 per point x 50 points)

 

[NEILM16]

anyone spreadbet options?

Does anyone spreadbet options?If so can u advise best companies and maybe a method or 2?It seems fairly straightforward.What i would like to do is sell options i know theres an increased risk but would like to know anyones actual experiences?

 

[oatman]

I think you need to read up on options. They may be more complicated than you think. There's more than increased risk involved in selling options.
You are wide open.

 

[Airthrey Capital]

NeilM16,

If you wish to adopt the strategy of selling options, very generally speaking, you are looking to take advantage of time erosion and / or an overpriced premium.

Whilst Oatman is quite correct that selling (naked) options is highly risky, there are several strategies that can be used to offset that risk (using both futures and options), yet still achieve your objective of profiting from time erosion or an overpriced premium.

There simply isn't enough space to go into detail here about what strategies you could use.

However, my own personal opinion is that if you are really serious about options, don't use an SB firm, but a "normal" futures / options broker (e.g GNI).

Successful options trading is all about being able to understand the fair pricing of premium. In my experience, SB's spreads for options are so wide, that any real advantage of identifying an over / under priced option is negated.