I am pretty sure many of us hold more than 100 shares of one or many companies, imagine putting that to work by selling covered calls…
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Options trading is not something we’re considering. Still, I’ll let you know if anything changes.
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Is there a reason why it isn’t being considered?
I would love options trading too.
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It’s a different product. You wouldn’t expect Apple to start making shoes;
Granted, these products are more closely related, but T212 also doesn’t have the scale of Apple either.
It comes down to capital allocation mostly, in money term but also time, energy and expertise. Derivatives trading in general are heavily regulated, options very much so in EU and UK. It just isn’t a market that makes lots of sense to enter around here, which you can see by how little brokers do offers options around here.
The two EU/UK entities that do are IBKR, and Degiro has a very narrow serving of index options.
Few banks in EU also offer their own options to their customers.
Other side of the Atlantic, TastyWork does accept EU/UK customers.
It’s not a different product?
Shares are held in custody at Interactive Brokers, and they offer options trading.
There seems to be a BIG appetite for options trading in the EU. The first broker that offers a full and complete service will likely see TONS of investors move their portfolios to them.
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My point exactly. Have you noticed no European broker has even suggested entering the market, despite the huge appetite you mention.
Even when RH wanted to enter the UK market, they said it would be without options.
There is a reason for that, and it’s called capital allocation. It is not that it wouldn’t be profitable, but that it is not the most profitable employment of resources, because it is anything but an easy venture.
Degiro only seem to have options on a few continental stocks.
IBKR on the other hand have all the options I’ve ever looked for. You need to pass a knowledge based test and confirm you have a minimum income and capital available. That said you don’t need to have a minimum amount in your account.
Be aware though the IBKR interface is not as user friendly as 212. I find I need a couple of different sources to get the info I’m looking for before entering a trade.
If it’s down to capital allocation, why does the US market provide it but the EU market is more reluctant?
I saw a poll on here for new features and it was in the top 5 requested items. Although I can’t seem to find it now - might have been deleted.
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Few reasons;
As i mentioned earlier, regulations in EU are much tougher regarding derivatives and options.
Options tend to have much lower margins as well, as the costs to derivatives exchanges are generally quite higher.
And also, despite the general interest you may see, the option market is much much smaller than it is in the US. Financial markets in general in EU attract substantially less interest than in the US, and even more so for derivatives.
All in all, it just doesn’t reach a critical mass that would be worthwhile to pursue.
I’ve said it before, and maybe you have misunderstood that part; it is not that there js no demand, and neither that it would be unprofitable; it’s about capital allocation. Each brokers we have in EU still all come to the same decision, that given their restricted resources, they would get better returns following other projects than offering option trading.
If they have a much greater available capital, and ran out of other profitable courses, they would probably enter the market; as it would still be a profitable one, and it is not forbidden in any way.
But in the current situation, it is not deemed a worthwhile allocation of their resources.
Now, I’m sorry if my answers don’t satisfy you, and I do not know the underlying problematics;
But I would say, if you’re expecting options to start being massively available in EU “anytime now”, don’t get your hopes too high. I think it very unlikely. But maybe the situation will improve over time.
In any case, IBKR is your best bet for options, easily accessible, pretty much every markets available, decent costs.
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Webull trading app is now available in the UK. The customer service said that Options trading should be available by the end of 2023…
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Why wait? IBKR has them now and they’re no doubt cheaper.
Yes that’s true. However although IBKR has improved their features, it could be a lot easier to use. For example, their take profit and/or stop loss could be a percentage instead of having to work out the percentage based on the strike price. I would love to set a take profit of 10% but instead I have to work out 10% of the strike price.