Daily options

Our daily option prices are set by our dealing desk, based on the following three factors: the time to expiry, the current level of the underlying market and the volatility of the market.

The more likely it is that the underlying market will be above a call option’s strike price at expiry, the higher the option’s margin will be.

Likewise, the more likely it is that the underlying marketing will be below a put option’s strike price at expiry, the higher the margin will be.

The margin is calculated as trade size x daily option price.

Selling options carries a much higher risk profile than buying them.

When you sell an option, you have the obligation to buy or sell at the strike price, and there’s no predicting how far past the strike the underlying may be at expiry. This means that when you sell call options the risk is potentially unlimited.

Learn more about the risks involved in options trading.

You can use our US-listed options and futures account to take long, short and non-directional positions. Our exchange-traded options allow you to use simple or complex strategies for more control over your trading.

Trading options via CFDs is similar to trading them on the open market. For instance, you can buy the right to trade ten FTSE 100 CFDs at 7100. You’ll pay a margin at the outset, where on a traditional option you’d pay a premium, but it functions in the same way – when buying, you won’t risk more than your initial payment. All CFDs on our options are cash-settled on closing – you’ll never have to deliver, or take delivery of, the underlying.

Learn more about trading options.

When you trade on margin, or trading CFDs on a spot market, you get greater exposure to a market than the amount you deposit to open the trade. However, as well as the potential for magnified gains, you could also experience magnified losses exceeding your initial deposit.

When you buy IG options you still pay a margin to open your position, but it works like the premium of a traditional option. You’ll get greater exposure to a market than the amount you originally deposited to open the trade, but your risk is limited to that initial payment.

When selling traditional options, you receive the premium upfront. When you sell IG CFD options, you’ll pay a margin upfront – your maximum profit if your trade works out. However, you’ll be left open to potentially unlimited losses if the market doesn’t go your way.