Options Trading in Australia 2026

How to trade options in 5 steps and open up more... options in your investing strategy.

Kylie Purcell's headshot
Thomas Stelzer's headshot

By

Kylie Purcell

&

Thomas Stelzer

Edited by

Moira Daniels

Updated

Fact checked
Ready to start trading options? Compare online brokers
4.6 based on 833 reviews

Options trading is a way to speculate on the future price movements of stocks and other assets, offering the ability to leverage your trades or even hedge against your existing portfolio.

But they're also not to be taken lightly.

Options are complex trading instruments that come with unique risks.

If you're ready to get started trading options, you can follow the steps below.

Otherwise you can learn more about how options trading works first.

How to trade options in 5 steps

Before you start you should have a clear understanding of how options trading works

  1. Sign up with an options trading platform. Keep an eye out for platforms with competitive options trading fees and make sure it offers the specific options you're looking to trade.
  2. Fund your account. You can normally deposit funds using a bank transfer.
  3. Select an options contract. You'll need to choose your strike price, option type and expiration date.
  4. Place the order. You'll need to confirm the options purchase, making sure that the contract details are correct.
  5. Monitor the contract. While an options contract will automatically execute (or expire) at a specific date, you can also sell options before expiry if you're looking to lock in profits or limit your losses.

What do I need to trade options?

There are a few key things you should have before you start trading options:

As we've mentioned above, you'll also need an account with a trading platform that offers options trading.

1. Find an options trading platform

There are a number of trading platforms that offer options in Australia.

To open an options trading account, you'll need:

  • To be 18 years or over and a resident in Australia.
  • Have basic information with you – the broker will usually ask you to prove who you are before signing up.
  • Most importantly, be able to pass an options trading assessment. Before you can trade options, you'll need to show the broker you have some understanding of how they work.

Before signing up you'll need to decide whether you want to trade Australian-listed stock options or options from overseas markets such as the US, as many platforms only offer one or the other.

It's also possible to trade options on other types of securities, such as commodities, indices, futures and forex.

Once you know what you want to trade, you can more easily compare the fees, features and trading tools to find the best broker for you.

Compare options trading platforms in Australia

4 of 17 results
Updated regularly
Finder Score Monthly fee Options trading fee Standard brokerage fee
9.6 Excellent
$0
US$0.99
Welcome offer: Enjoy 30 days of $0 brokerage on AU and US stocks and receive up to 38 free shares when you open and fund your account and complete qualifying tasks. Offer ends 25 Oct 2026. T&Cs apply.
$100Finder Rewards: Join Finder then sign up as a new Moomoo customer, deposit at least $1,000 and execute at least one BUY order within 30 days to receive a $100 digital Visa gift card. Ends 2 Nov 2026. T&Cs apply.
Trade major markets with built-in social trading tools.
$100$100 REWARD
Go to siteView details
Compare product selection
9.3 Excellent
$0
US$2.00
Deposit any amount and receive $20 to trade in Tiger Brokers. Plus 4x zero brokerage trades and no FX fees on the first $2,000 you exchange every month. T&Cs apply.
$120Finder Rewards: Join Finder then sign up to Tiger Brokers, deposit $2,000 within 7 days and complete a qualifying BUY trade within 20 days to receive a $120 digital Visa gift card. Ends 31 Dec 2026. T&Cs apply.
Trade US, Asian and CHESS-sponsored ASX stocks, China A-class shares, plus US and Hong Kong options and ETFs.
$120$120 REWARD
Go to siteView details
Compare product selection
9.8 Excellent
$0
$0.00
Earn up to 5,000 Qantas Points per month on international trades, plus 2,500 bonus points on your first international buy order with Webull. Min spend and T&Cs apply.
$150Finder Rewards: Join Finder then sign up to Webull as a new customer, deposit at least $2,000 in a single transaction and place at least 1 BUY order for a US-listed stock or ETF during the promotion period to receive a $150 digital Visa gift card. Ends 31 Oct 2026. T&Cs apply.
Invest in over 15,000 shares, options, and $0 Brokerage on all U.S. and Australian Chess-Sponsored ETFs.
$150$150 REWARD
Go to siteView details
Compare product selection
CMC Invest logo
9.9 Excellent
CMC Invest
Finder Award
9.9 Excellent
$0
AUD$33.0
$0.00
Trade 40,000+ listed securities across the local markets and 15 major global exchanges.
Go to siteView details
Compare product selection
loading
Showing 4 of 4 results

Finder Score for share trading platforms

We've scored over 30 share trading platforms assessing them for their core features, fees, customer experience and accessibility. Our experts give each platform a score out of 10.

Read the full methodology

Australia's best trading platforms

2. Fund your account

Before placing your trade, you'll need to top up your account with enough funds.

Depending on who you sign up with, there's usually a few ways to fund your account, including direct deposit, via a credit card, PayPal or even BPAY.

You can usually fund your account by following the prompts in your broker's account.

If you're using leverage, keep in mind that you'll need enough funds to cover potential losses, which may be greater than your initial trade amount.

There's also usually a minimum amount required when trading options. This will vary from broker to broker but generally speaking, you'll need to start with at least $1,000.

3. How to choose an options contract

Once you've decided which company share or other asset you want to trade (called the underlying asset), you'll need to select your contract.

Every contract has a different expiration date, strike price and option type, so you'll need to decide all of these factors when choosing.

The expiration date is the date on which the options contract expires. After this date, the contract is no longer valid and the option either becomes worthless or is exercised by the holder, meaning the underlying asset is bought or sold.

The strike price is the price at which the underlying security can be bought or sold when the option is exercised. This price is predetermined and is stated in the options contract.

For example, if you buy a call option with a strike price of $200 on Apple shares, you have the right to buy Apple shares at $200 per share before the expiration date.

Finally, the option type refers to whether you want to buy or sell a call option or a put option. A call option gives you the right (but not the obligation) to buy the underlying security at the strike price, while a put option gives you the right to sell the underlying security at the strike price.

Which contract type you pair with your chosen asset depends on how you think that asset will perform.

Generally speaking, if you think the asset's price will rise, you should buy a call option or sell a put. Alternatively, if you predict the stock or market price will fall, you should buy a put option (also called shorting) or sell a call option.

4. Place your trade

After you've chosen your contract and funded your account, it's time to open the trade.

First, you need to decide on the price at which you want to enter the trade, known as the premium. This is the price you're willing to pay the seller for the contract or the price you're willing to accept if selling.

This price is influenced by factors such as the current market price of the underlying security, implied volatility, the expiration date and other market factors.

You also need to consider the premium that the market is currently offering for the options contract. This market premium is set by the bid-ask spread, which is the difference between the highest price a buyer is willing to pay for the option (the bid price) and the lowest price a seller is willing to accept (the ask price).

Once you have determined the price, it's time to place your order. You can choose between a market order or a limit order.

A limit order allows you to set the maximum price you are willing to pay (if buying) or the minimum price you are willing to receive (if selling) for the option. A market order will execute at the current market price, which may result in paying a higher premium than you initially intended due to the bid-ask spread.

5. Monitor your trade

Once you've purchased your options contract it's important you keep an eye on the price movements of the underlying asset. While your option will either expire or execute at the agreed expiration date, you can choose to close it before that date.

Depending on the performance of the asset, you may be able to sell an options contract at a profit if the premium has increased from when you bought the contract. This can happen if the option looks like it will reach the strike price (which means it would be "in the money").

How to develop a trading strategy

To trade options successfully, it's crucial to have clear investment objectives and a plan in place. Consider what options you want to trade, how much you want to invest, which strategies to use, and your risk tolerance.

Remember that options trading is riskier than passive investing, so it may not be suitable for more conservative investors. Despite the potential for large returns, statistically speaking, trading options is more likely to result in losses.

Knowing your end goal will help to inform which options trading strategy you use, including your entry and exit strategies and the assets you select. For instance, are you hoping to make a profit by speculating on asset price volatility?

Or are you intending to use options to hedge against falling prices of shares you already own? Perhaps you're trying to build up a passive income? These goals require very different strategies and planning.

Once you know all this, you can start to decide which assets to focus on and how you'll be trading them.

Finder survey: Which industries do people hold stocks in?

ResponseMaleFemale
Banking and finance19.85%9.45%
Mining17.81%5.8%
Technology and IT13.54%6.14%
Telecommunication12.99%3.65%
Energy12.24%5.14%
Healthcare10.39%4.81%
Property9.09%1%
Food and beverage8.91%3.15%
Lithium7.98%1.16%
Gold6.86%2.65%
Iron Ore6.68%1.49%
Coal4.82%0.66%
Renewable energy4.82%2.32%
Biotechnology4.45%0.83%
Artificial Intelligence2.97%1%
Cannabis0.56%1.33%
Source: Finder survey by Pure Profile of 1145 Australians, December 2023

What is an option?

An option is an agreement between 2 parties to enter into a contract that gives the owner the right, but not the obligation, to buy or sell the underlying asset at an agreed-upon price by a certain date.

Options contracts are derivatives investments, which means you're exchanging contracts rather than buying and selling physical assets. There's always an underlying asset attached to the contract, such as shares or commodities, which is how a price is determined.

You can trade different financial products through options, including the following:

  • Stocks and shares
  • ETFs
  • Currencies
  • Indices
  • Bonds

Similar to trading shares, you'll profit based on the difference in the contract's price from the day you enter the contract to its future price.

In Australia, you'll come across ETOs which are attached to shares listed on the ASX. These work in the same way as regular options and allow you to trade ASX-listed shares.

Options listed on overseas markets, such as the United States, are also possible to trade from Australia, depending on the platform you use.

Options vs share trading

At this point, you might be asking yourself, why not just buy shares or commodities? While there are various reasons to trade options over buying shares, most investors trade options for the following reasons:

  • Options can amplify profits using leverage
  • They can protect shares from loss
  • They can provide extra income from shares
  • They allow you to speculate/make money in a falling market
  • They can be a lower-cost way to invest
  • They allow investors to have more flexible or complex strategies

On the downside, trading options is usually much riskier than directly buying or selling shares. While buying shares is a relatively simple process, options trading can be complicated and has a greater chance of miscalculation leading to loss.

Options traders also typically use leverage which means they can enter a large trade with a small amount of initial capital. While this can amplify profits, it will also amplify losses if the trade goes against the trader.

While investing in the share market directly is suitable for investors of any level of experience, options trading is best suited to more experienced traders.

How to buy shares online

How does options trading work?

The 2 main participants in an options contract are the "buyer", who is the person that purchases the contract, and the seller of the contract, dubbed the "writer".

There are 2 types of options that you can either buy or write. A call option gives its buyer the choice to purchase shares from its writer at a specific price (the "strike price") before a set time (the "expiry date"). A put option is the opposite, where the buyer enters a contract to sell the shares to the writer at a set price within a specific time frame.

The buyer of a call option is hoping that the underlying shares will rise in price, while the put option buyer is betting that prices will fall. The writers of the contract are hoping for the opposite.

Remember that the buyer of the contract has the right to buy or sell the underlying share as laid out in the contract (called exercising) but is not actually required to do so.

If the option is not exercised, it will expire worthless on the expiration date. If the option is exercised, the buyer of the option will either buy or sell the underlying asset at the agreed-upon price. If the trader is holding a short option position that is exercised, they will need to fulfil the obligation to buy or sell the underlying asset.

Example: If a trader buys a call option on a share with a strike price of $50 and the share price rises to $60, the trader can exercise the option and buy the share at $50, then sell it at the market price of $60, realising a profit of $10 per share.

The 2 types of options

The 2 main types of options contracts are call options and put options.

Call options

Buying call options gives you the right to buy an asset at a predetermined price within a specific time frame.

Selling call options obligates you to sell your assets to the buyer of the option if they exercise their option.

Day traders often use call options to open multiple positions without having to devote too much of their capital to a specific trade.

But how do call options work?

Let's say shares in Company X currently trade at $100 per stock but you believe the stock price will move higher.

You buy 1 call option, which is the right to buy 100 stocks of the company at an agreed upon price ($100 per stock). To buy this options contract, you pay a premium of $500 ($5 x 100 stocks).

With a $500 investment, you are exposed to 100 stocks worth $10,000.

A week later, the stock price climbs to $120 per stock. The premium on your option increases in value as it's now offering an investor the ability to purchase 100 shares at a lower price ($100) than they could currently get on the market ($120).

If you wanted to exercise the option, you would need to have $10,000 in your account to buy the 100 stocks at the agreed-upon price of $100 each.

But instead of buying the stocks, you sell the options contract to another trader for a higher premium than what you paid and pocket the difference between the price you paid for the option and the price for which you sold it on the market.

Put options

Buying put options gives you the right to sell an asset at a predetermined price within a specific time frame. These are the opposite of call options.

Put options are often used by investors to hedge against another position. For example, a trader might own a lot of Apple stock but then buys a put on Apple to help mitigate against any losses if the price of Apple shares goes down.

This is how put options work:

Suppose you buy 100 stocks of Company X at $100 per stock for a total investment of $10,000.

You believe the stock price will move higher, but are concerned the price may drop in the short term.

To protect your investment, you buy a put option contract worth $500 (100 stocks x $5 premium per stock).

This put contract gives you the right to sell 100 stocks at an agreed-upon price by a specific date.

In this case, let's say the agreed-upon price is $100 per stock and the expiration date is 30 days later.

The stock price starts to drop. By the time the contract reaches the expiry date, Company X stocks are worth $70 apiece. The 100 shares you bought for $10,000 are now worth $7,000, for a paper loss of $3,000.

Luckily, you bought the put option and decided to exercise it. You sell your 100 stocks for $100 each – the agreed-upon price in the contract – instead of the market price of $70.

In this scenario, you're $500 down for the premium you paid to buy the options contract instead of $3,000.

How much does options trading cost?

If you trade options, you'll face a number of different fees, depending on what you trade and where you trade them.

Keep an eye out for:

  • Broker commissions: These are basically paying for a trade to be executed or any investment advice. Depending on the broker, sometimes these fees are waived.
  • Contract fee: Charged by brokers when an options contract is exercised or assigned. This fee is typically charged per contract and can vary depending on the broker and the exchange where the option is traded.
  • Platform fees: You can be charged numerous fees for using the trading platform.
  • Pass through fees: Options regulatory fees, SEC membership fees, FINRA trading activity fees, OCC clearing fees
  • Exchange fees: These fees are usually charged when you trade in a foreign currency. You will pay a small percentage to transfer into and out of the foreign currency.

Many of these fees are a fraction of a cent, but given you will be charged them, it is best to take note of what you're paying to the broker.

In Australia, the biggest fee you'll pay is the broker commission fee which can range from $5 to $50 depending on the assets you're trading.

What are the risks of options trading?

As we've hopefully drilled into you by now, options are a complex and risky trading instrument and are only suitable for experienced traders.

There are a number of risks you'll need to keep in mind when trading options:

  • Market volatility: Options trading can be particularly risky in volatile markets, where sudden price movements can lead to significant losses or gains. Even if the underlying asset moves in the direction predicted, volatility can result in the option expiring out of the money, which means it loses its value.
  • It's hard to get the price right at the exact time. With options trading, you're not only betting on the stock price – you're betting on the stock price at a specific time. This means you may be right that the stock price will rise or fall, but being correct about when is hard.
  • The premium is non-refundable. When you buy an options contract, the premium you pay goes to the seller of that contract. That's how you pay the other side to take your risk. Whether you're right about the stock price or not, the premium you pay is non-refundable.
  • You'll likely pay a fee. Most brokers charge fees for options trading. This fee is often under $1–$1.50 per contract. You may also pay up to $19 for an options exercise fee.
  • Leverage: Options trading involves leverage, which means that traders can control a large amount of the underlying asset for a relatively small upfront investment. While leverage can amplify profits, it can also amplify losses.
  • Complexity: Options trading can be complex. Traders need to understand the various strategies and trading techniques to be successful. A lack of understanding can lead to mistakes and losses.

Frequently asked questions

Sources

To make sure you get accurate and helpful information, this guide has been edited by Moira Daniels as part of our fact-checking process.
Kylie Purcell's headshot
Written by

Investments Analyst
Add to Preferred Sources

Kylie Purcell is an experienced investments analyst and finance journalist with over a decade of expertise in a wide range of financial products, including online trading platforms, robo-advisors, stocks, ETFs and cryptocurrencies. She is a sought-after commentator and regularly shares her insights on the AFR, Yahoo Finance, The Motley Fool, SBS and News.com.au. Kylie hosts the Investment Finder video series and actively contributes to the investment community as a judge and panellist. She holds a Master of Arts in International Journalism, a Graduate Diploma in Economics, and ASIC-recognised certifications in securities and managed investments. See full bio

Kylie's expertise
Kylie has written 167 Finder guides across topics including:
  • Investment strategies
  • Financial platforms
  • Stockbrokers
  • Robo advisors
  • Exchange traded funds (ETFs)
  • Ethical investing
  • ASX stocks
  • Stock and forex markets
Thomas Stelzer's headshot
Co-written by

Journalist

Tom Stelzer is a journalist with 6 years of experience covering personal finance, specialising in investment and cryptocurrency. With a Master of Media Arts and Production and a Bachelor of Communications in Journalism from the University of Technology Sydney, Tom provides expert analysis on digital assets and market trends, helping readers navigate the fast-evolving world of finance. See full bio

More resources on Finder

Get rewarded $$ for switching with Finder Rewards

Find a better deal, save on your bills and get a free gift card. Sign up to be the first to hear about new Finder Rewards.

Ask a question

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms Of Service and Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

2 Responses

    Pieter's avatar
    PieterApril 8, 2025

    Can you please compare the brokers that offer the best pricing and benefits for Australian Exchange-traded Options (Not US options)?
    Many comparisons on Google say Australian but it is actually US options only they offer.

      Kylie Purcell's headshotFinder
      KylieApril 10, 2025Finder

      Hi Pieter, You raise a really good point here. We don’t make it clear which platforms offer ASX options vs US options. We do highlight this a little in the pros and cons sections displayed here: https://www.finder.com.au/share-trading/best-options-trading-platforms however we could do a better job. In the meantime, check out the comparison table on either of the pages (deselect ‘Only show Finder Partner products’ to get a full list of platforms) — the fees to trade ASX options are always around $30, while US options trade fees will be just a few dollars. So any platforms that show an options trading fee of over $25, will be offering ASX options. Hope this helps.

More guides on Finder

Go to site