The Final Countdown: Who Will Win the ASX Options Game?

The ASX Options Game is rounding to an end and we will soon be crowning our winner when the market closes this Friday afternoon, the 25th of October. It has proven to be a hotly contested game, with over 480 active players and thousands of trades placed.

With a lot still to happen in the market and the XJO enjoying a consistent yet somewhat volatile week, we expect it to be a close race to the finish line. A combination of beginner and professionally skilled players have worked their way to the top five positions on the ladder and we eagerly await to see who will win it all.

Currently atop the ladder is Daniel from Victoria with $238,793 (as of the 23rd of October at 2pm), but there is no guarantee that he’ll hold this prime position. There have been a number of sophisticated trades and well thought out strategies employed during this game, and there is every opportunity that someone else could take the crown. 

During this Options Game, we have seen a strong mix of trade strategies varying between calls, puts, and spreads. Proving that keeping a close eye on the market data and news headlines can be key, there were several savvy players who made money from bearish short put trades on Afterpay (ASX: APT). Possibly due to the recent negative press, AfterPay experienced a fall in its share price and overall trader confidence around the 14th of October. This occurred after the news stories warning Afterpay users that their “buy now, pay later” spending habits could potentially ruin their credit scores and place them under high scrutiny for home loan applications. Turning a spot of bad press into some good news of their own, the players whose APT short put trades expired after this date would have seen a considerable rise in their portfolios.

However, it is not over until the final bell – but whom will it be tolling for this time around? Whether you’ve secured yourself a good ranking or have fallen towards the bottom of the ladder, the final week is a good time to try out some big trades and test your knowledge on the more complicated strategies for later use. 

A popular, more difficult trade is a long strap, which is a strategy consisting of one put and two calls. Traders use it when they believe the underlying asset is going to move, but aren’t sure in which direction. Another traders’ favourite which can be tricky to understand at first is the iron condor, because of its limited risk and a higher probability of success. It’s entered through a combination of four different contracts that don’t have an inherent bullish or bearish bias. You basically enter a bull put spread (strikes A and B) and a bear call spread (strikes C and D).

Try your hand at a few difficult strategies and take advantage of its education resources while the game is still open. Who knows – maybe a gutsy trade will pay off.

 

*Past performance is not a reliable indicator of future performance.

*Trading options is not suitable for everyone. There is a risk that you can lose more than the value of a trade or its underlying assets. You should only trade if you are confident that you fully understand what you are doing. If you are thinking about acquiring a financial product, you should consult our Financial Services Guide (FSG) at www.reachmarkets.com.au and the relevant Product Disclosure Statement first.