February saw exchange traded options volume spread across a wide range of underlying shares, highlighting that the use of options is becoming a common strategy for investors in the overall management of their portfolios, rather than in response to any one-off market event.
ASX has previously attributed the growth in the options market to enthusiastic retail participation, growing retail investor sophistication and the use of index options; the most popular of which (S&P/ASX 200 Index options) grew 74% in terms of contracts traded in 2003.
ASX has a track record of encouraging education in retail investors in exchange traded options. The most recent initiative is the return of US options expert, Alex Jacobson, whose seminars sold out during his last visit.
ASX is also now focusing on institutional investors such as fund managers after recent research by independent research body, SIRCA, found that fund managers stood to increase the returns on their portfolios by as much as 23 percent, if the employed a 'Buy-Write' strategy, rather than just following the S&P/ASX 200 index.
The Buy-Write strategy is an investment strategy in which an investor buys a stock, or a basket of shares, and also writes covered-call options that correspond to the stock, or basket of shares. Covered-call writing is the strategy of writing call options against shares already owned and lodged as collateral.
* Average Daily Trades divides the total number of trades by the number of trading days in the month, providing a standard way to measure monthly volumes, as trading day numbers differ each month.
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