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What is options trading?
Options trading is the act of buying and selling options. These are contracts that give the holder the right, but not the obligation, to buy or sell an underlying asset at a set price, if it moves beyond that price within a set timeframe.

For example, let’s say that you expected the price of US crude oil to rise from $50 to $60 a barrel over the next few weeks. You decide to buy a call option that gives you the right to buy the market at $55 a barrel at any time within the next month. The price you pay to buy the option is known as the ‘premium’.

If US crude oil rises above $55 (the ‘strike’ price) before your option expires, you’ll be able to buy the market at a discount. But if it stays below $55, you don’t need to exercise your right and can simply let the option expire. In this scenario, all you’ll have lost is the premium you paid to open your position.

Buying a call option on oil
When you trade options with us, you’ll be using CFDs to speculate on the option’s premium – which will fluctuate as the probability of the option being profitable at expiry changes. CFDs are leveraged products, meaning you’ll pay an initial deposit (called premium) upfront to open a position. Trading options in this way can form an important part of a wider strategy. However, profits and losses are calculated based on the full position size, not your premium size.

Open an account to start trading options today
The essentials of options trading
Take a look at the key types, features and uses of options:

Call options
Put options
Leverage
Hedging
What are call options?
Buying a call option gives you the right, but not the obligation, to buy an underlying market at a set price – called the ‘strike’ – on or before a set date. The more the market value increases, the more profit you can make.

Buying call options

You can also sell call options. As the seller of a call option, you will have the obligation to sell the market at the strike price if the option is executed by the buyer on expiry.

You can also sell call options. As the seller of a call option, you will have the obligation to sell the market at the strike price if the option is executed by the buyer on expiry.

Selling call options
Options are leveraged products much like CFDs; they allow you to speculate on the movement of a market without owning the underlying asset. This means profits can be magnified – as can your losses, if you’re selling options. When buying call options as CFDs with us, you’ll never risk more than your initial payment when buying, just like trading an actual option, but when selling call or put options your risk is potentially unlimited (although your account balance will never fall below zero). Your positions will always be cash-settled at expiry. You’ll never have to deliver, or take delivery of, the underlying.

What are put options?
Buying a put option gives you the right, but not the obligation, to sell a market at the strike price on or before a set date. The more the market value decreases, the more profit you make.

Buying put options

You can also sell put options. As the seller of a put option, you will have the obligation to buy the market at the strike price if the buyer exercises their option on expiry.

Selling put options

Options traders can use CFDs to speculate on options prices – instead of trading them directly. Since CFDs are cash-settled at close, you’ll never have to deliver, or take delivery of, the underlying. However, these are leveraged forms of trading options. This means that you’ll pay a smaller deposit (known as margin) to open your trade but will have your profits or losses calculated based on the full position size. So, you can lose (or gain) substantially more than your initial deposit. Note that when buying call options as CFDs with us, your risk is always limited to the margin you paid to open the position. But when selling call options your risk is potentially unlimited.

What is leverage in options trading?
Options are leveraged products and much like CFDs they allow you to speculate on the movement of a market without ever owning the underlying asset. This means your profits can be magnified – as can your losses, if you’re selling options.

For traders looking for increased leverage, options trading is an attractive choice. By choosing your strike and trade size you get greater control over your leverage than when trading spot markets.

If you’re a trader who’s buying call or put options as CFDs with us, your risk is always limited to the margin you paid to open the position. However, it’s important to remember that when selling call or put options your risk is potentially unlimited, so an effective risk management strategy is important.

How can you hedge with options?
Hedging with options allows traders to limit potential losses on other positions they might have open.

Say you owned stock in a company, but were worried that its price might fall in the near future. You could buy a put option on your stock with a strike price close to its current level. If your stock’s price is down below the strike at your option’s expiry, your losses are limited by the option’s gains. If your stock’s price increases, then you’ve only lost the cost of buying the option in the first place.

How to trade options
Options trading terminology
What moves options prices
Learn the risks
Options trading strategies
Markets to trade
Market movement time frames
Placing an options trade
Monitoring positions
Video poster image
Understand options trading terminology
Traders use some specific terminology when talking about options. Here’s a rundown of some of the key terms:

Holders and writers: the buyer of an option is known as the holder, while the seller is known as the writer. For a call, the holder has the right to buy the underlying market from the writer. For a put, the holder has the right to sell the underlying market to the writer
Premium: the fee paid by the holder to the writer for the option. When trading CFDs on options with us, you’ll pay a margin that works in a similar way to the premium
Strike price: the price at which the holder can buy (calls) or sell (puts) the underlying market on the option’s expiry
Expiration date/expiry: the date on which the options contract terminates
In the money: when the underlying market’s price is above the strike (for a call) or below the strike (for a put), the option is said to be ‘in the money’ – meaning that if the holder exercised the option, they’d be able to trade at a better price than the current market price
Out of the money: when the underlying market’s price is below the strike (for a call) or above the strike (for a put), the option is said to be ‘out of the money’. If an option is out of the money at expiry, exercising the option will incur a loss
At the money: when the underlying market’s price is equal to the strike, or very close to being equal to the strike, the option is referred to as ‘at the money’
Break-even point: when the underlying market’s price is equal to an option’s strike plus premium (for a call) or strike minus premium (for a put), your trade is at its ‘break-even point’. This means it isn’t making a profit or a loss
Identify what determines an option’s price
There are three main factors affecting the premium, or margin, you pay when you trade options. All these factors work on the same principle: the more likely it is that the underlying market price will be above (calls) or below (puts) an option’s strike price at its expiry, the higher its value will be.

When you trade CFDs on an option with us, you’ll pay a margin that works in a similar way to a traditional option premium.

Level of the underlying market
The further below the underlying a call option’s strike is, or the higher above the underlying a put option’s strike is, the higher their premiums are likely to be as they are ‘in the money’ – there’s more chance of them expiring with value.
Time to expiry
The longer an option has before it expires, the more time the underlying market has to pass the strike price – so an out-of-the-money option will tend to lose value as it nears its expiration date and there’s less chance of it expiring profitably.
Volatility of the underlying market
The more volatile an option’s underlying market is, the more likely it is that it will pass the strike price. So volatility tends to increase an option’s premium.
Learn about the Greeks
The Greeks are measures of the individual risks associated with trading options, each named after a Greek symbol. Understanding how they work can help you calculate the risk involved with each of the variables that affect option prices.

Delta
Delta is a measure of how sensitive an option’s price is to the movement of the underlying market. Assuming all other variables stay the same, you can use delta to work out how much impact market movement will have on the value of your option.
Gamma
A derivative of delta, gamma measures how much an option’s delta moves for every point of movement in the underlying market.
Theta
Theta measures how much an option’s price decays over time. A high theta indicates that the option is close to the expiration date; the closer the option is to expiry, the quicker the time value decays.
Vega
An option’s vega measures its sensitivity to volatility in the underlying market, or how much the option’s value will change for every 1% change in volatility.
Rho
Rho indicates how much interest rate changes will move an option’s price. If the option’s price will go up as a result of interest rate changes, its rho will be positive. If the option’s price will go down, its rho will be negative.
Pick an options trading strategy
There are numerous strategies you can use to achieve different results when you’re trading options. Popular options trading strategies include:

Buying a call option
The simplest options trading strategy involves buying a call option when you expect the underlying market to increase in value. If it does what you expect and the option’s premium rises as a result, you’d be able to profit by selling your option before expiry. Or, if you hold your option until expiry and the underlying market is above the option’s strike price, you’ll be able to exercise your right to buy at the strike and profit in that way.

Buying call options is a popular strategy because you can’t lose more than the premium you pay to open.
Buying call options
Buying a put option
Another simple options trading strategy is to buy a put option when you expect the underlying market to decrease in value. If it does what you expect and the option’s premium rises, you’d be able to profit by selling your option before expiry. You could also hold your option until expiry, and would profit if the underlying market was below the strike price.

Buying puts is popular because you can’t lose more than the premium you pay to open the position.
Buying put options

Hedging your investment
If you own an asset and want to protect it against potential downwards market movement, you could buy a put option on the asset. This is called a married put – if the asset price drops, you would make gains on the put which would help limit your loss.
Hedging your investment

Short calls (selling a call)
A covered call is the simplest short call position – you sell a call option on an asset that you currently own. If the price of the asset doesn’t exceed the strike price of the option you’ve sold, you keep the margin as profit. This strategy is often used to generate some income when you think an asset you hold is going to stay neutral.

Writing a call option when you don’t own the underlying asset is known as an uncovered or naked call. This is a risky strategy, as you could end up having to pay for the full cost of the asset.
Short calls

Spreads
Spreads are when you buy and sell options simultaneously. When you trade with a call spread you buy one call option while selling another with a higher strike price. Your maximum profit is the difference between the two strike prices.
Bull call spread

Straddles
When you place a straddle, you buy or sell a call and a put position simultaneously on the same market at the same strike price. This gives you the potential to profit regardless of whether the market moves up or down, making them a good strategy if you expect market volatility but are unsure which way it will move.

Your break-even levels will be the strike price, plus or minus the sum of the two premiums on either side of the strike. Your maximum risk is still the price you paid to open the positions.

The break-even levels only apply if you leave your option to expire.
Long straddle example

Strangles
A strangle is very similar to the straddle above, however you buy calls and puts at different strike prices. This means that you typically pay less to open the trade, but will need a larger price movement to profit. The trade is still limited-risk.

In the above examples, if you closed your position before expiry, the closing price is affected by a range of factors including time to expiry, market volatility and the price of the underlying market.

You can find out more about options trading strategies in our strategy article.
Long strangle example
Choose a market to trade options on
You can trade options on a huge number of markets with us.

Forex – including majors like EUR/USD, GBP/USD, USD/CHF and EUR/GBP
Shares – including ASX 200 shares and a selection of leading US shares
Stock indices – including the ASX 200 and Wall Street
Commodities – including metals and energies
Open an options trading account with IG
Determine the time frame during which the market is likely to move
Depending on the kind of trade you’re making, you can choose between daily, weekly, monthly or quarterly options to suit your goals.

Daily, weekly, monthly or quarterly options to suit your goals
Use daily and weekly options if you want to take positions on markets quickly, but with greater control over your leverage than when trading other products – such as trading CFDs on spot markets.

If you’re looking at longer-term market movement, monthly and quarterly options mean you can take positions up to three quarters before expiry – plus you’ll know your risk upfront and usually save on funding charges.

Find out more about trading daily and weekly, monthly and quarterly options.

Decide whether to buy or sell, and place your trade
Once you know the timeframe you’re going to trade, you need to determine whether you want to buy or sell a call or put option on the market you’re trading. The type of option you trade, and whether you buy or sell, will depend on whether you want to speculate on the market rising or falling. Remember that buying options is limited-risk, while selling is not.

How to buy or sell call and put options
Once you’ve decided whether to go long or short, you can choose the strike price and premium (or margin) you want to open the position at, and place your trade.

Create a live account to trade options now
Monitor your position
Once you’ve opened a position, you need to keep an eye on market movement and the potential profit or loss of your position.

Monitoring an options trade on USD/JPY

If the option is in the money, you may wish to close it before the expiry to maximise profit. Or if you aren’t in profit you can leave your position open to expiry, and, if it fails to move into profit, only lose the price you paid to open.

Trade options with CFDs
When you trade options with CFDs, your trade mirrors the underlying options trade. A call option to buy $10 per point of the ASX with a strike price 7100 would earn you $10 for every point that the FTSE moves above 7100 – minus the margin you paid to open the position.

You need an account with a leveraged trading provider, like IG, to trade CFDs. Find out more about CFD trading.

Why trust Our experts?      did you really read all of this?

Was this article helpful?  We do hope so, however if you made it to here to make your usual comments…well, comments are blocked. We don’t care about your pointless point of view.

Reformatted by a dedicated research team member to meet our goals. We make no apologies for using copy and paste techniques to fast track these articles for our followers.

We take the time to read, adjust, add and review the important points, so you do not have to……Why reinvent the wheel?

We unpack how to start a blog for your small business. And explore some actionable blogging tips to help you hit the ground running.

19 December 2023 · 5 minute read

What is a blog?
To put it simply, a blog is a website or webpage that is used to host written content. The content is typically focused on a specific topic, niche or industry area and is regularly updated. Blogs often take on a more conversational tone, as they intend to connect with their readers on a more personal level.   

How can a blog help?
A blog can be a great marketing and eCommerce tool due to the many benefits of blogging for business.

Business blogging can:

Help enhance your online presence
Help drive traffic to your website
Help build credibility in your chosen field
Help nurture important relationships with existing and potential customers.
Learn more about the benefits of blogging for small business.

Things to consider when starting a blog
Before you launch in, you’ll need to determine how your blog will be set up, managed and updated.

Below, we discuss some important factors to consider, when integrating business blogging into your overall marketing strategy.

Choosing a content management system (CMS)
Many small businesses opt to use a content management system, commonly referred to as a CMS.

What is a CMS?
A CMS is a software that helps business owners manage and update their business website. It’s a great option if you want the ability to make changes to your website over time. And publish new content.

When selecting which CMS is right for you, consider components such as:

User-friendliness
Software costs
Compatibility with business needs
Features.
A CMS can help set the foundation for a simplistic and more seamless blogging experience. With the right technology in place, you can focus on creating high-quality content that resonates with your customers.

You can also explore integrated website solutions where your website provider offers the ability for you to add a blog to your website without the need for you to choose a separate CMS.

Generating ideas for blogging topics
Once you’re set up with the right technology to launch your blog, you’ll need to decide which blogging topics you’re going to focus on.

Content ideation is an incredibly important step when it comes to business blogging. You want to identify content opportunities that really resonate with your audience.

There are many different factors you should consider when generating ideas for blogging topics. These can include:

Trends
Industry news
Evergreen content that stays relevant over time
What your competitors are talking about
What your target audience is searching for
Topics with high keyword volumes.

Creating a content calendar
If you’re looking for useful blogging tips to help you get started, then consider mapping out a content calendar.

Also commonly referred to as an editorial calendar, a content calendar is a schedule that determines when and where you’ll publish your content.

A content calendar can help keep your blog on track. And empower you to strategically plan ahead of time. This way, your business blogging doesn’t have to be reactive or last minute.

When creating your content calendar, explore where blogging topics most logically fit. We breakdown some considerations for developing a content calendar below.

Seasonal considerations
Perhaps there are holidays that present a good opportunity to launch certain blogging topics due to seasonal relevance.

For example, you might write a blog offering tips, tricks and insights for customers navigating the Christmas sales period.

Leveraging holidays and key calendar dates can help you publish timely content that’s relevant for your customers.

Business considerations
Maybe you have certain business events, product launches or promotional periods. Consider aligning your content calendar with your overall business goals and objectives.

Your content calendar and blogging topics can help support your promotional periods and other marketing campaigns.

Customer considerations
It’s important to develop an understanding of your target audience’s behaviour. When are they active online or on social media? Consider when they’ll be most likely to engage with your content, and tailor your content calendar around this.

Learn more about how to plan an effective digital content strategy.

Maximising blog exposure
You’ll also need to decide how you’ll share and amplify your blog. By strategically sharing your blog content across different channels, you can help increase its impact.

Social media integration
You can integrate integrate blogging into your social media strategy. Sharing your blog on platforms such as LinkedIn and Facebook can be a great way to increase your blog’s reach. And help drive traffic to your business website.

Email marketing integration
Integrating your blog with your email marketing is another effective way to help increase exposure.

Featuring links to relevant blog articles in your newsletter and communications can help customers in your database access more in-depth content and valuable information. When doing this, you’re encouraging subscribers to engage further with your brand and explore your business website. This can help foster customer relationships and help build a sense of community.

Implementing calls to action
When exploring how to start a blog for your small business, consider how you can integrate calls to action.

A call to action, commonly referred to as CTA, is a prompt that tells people what to do when they have an interaction with your business. For example, a button or a link with words like ‘Explore more’, ‘Buy now’ or ‘Sign up’.

By featuring CTAs on your blog pages, you can help generate leads and help increase conversions.

Learn more about conversion rate optimisation (CRO).

Leveraging blogging for search engine optimisation
When starting a blog, it’s important to learn about search engine optimisation.

Search engine optimisation, also known as SEO, refers to the practise of optimising website content to improve visibility in a search engine results page.

By using high-performing keywords in your business blogging, you can improve the traffic quantity and quality to your business website.

Learn more about how to help improve SEO ranking for your business and the benefits of SEO for small business.

Developing a backlinks strategy
Integrating backlinks can be another wise move when launching a blog. Backlinks are links from one website or webpage to another, that can play an important role in SEO.

Internal backlinks
Internal backlinks are links on your own business website. They help Google find, index and understand all of the pages on your site, which can improve SEO. They can also help improve user experience. This is because readers can click these links to explore other relatable content that they’re interested in.

External backlinks
External backlinks are links on other websites that direct traffic to your site. They’re also important for SEO. This is because they can demonstrate that other websites find your content valuable and credible enough to reference.

When starting a blog for your small business consider developing a backlinks strategy. This could include asking other businesses to link to your blog content on their website.

Make business blogging your next move
There are so many aspects to consider when starting a blog. With the right technology and strategy in place, business blogging can help transform the way you connect with your audience. And with some careful planning, it can be a great next move to help you make a powerful impact.

Why trust Our experts?      did you really read all of this?

Was this article helpful?  We do hope so, however if you made it to here to make your usual comments…well, comments are blocked. We don’t care about your pointless point of view.

Reformatted by a dedicated research team member to meet our goals. We make no apologies for using copy and paste techniques to fast track these articles for our followers.

We take the time to read, adjust, add and review the important point, lidity so you do not have to. Why reinvent the wheel?

The above graph compares global surface temperature changes (red line) and the Sun’s energy received by Earth (yellow line) in watts (units of energy) per square meter since 1880. The lighter/thinner lines show the yearly levels while the heavier/thicker lines show the 11-year average trends. Eleven-year averages are used to reduce the year-to-year natural noise in the data, making the underlying trends more obvious.

The amount of solar energy Earth receives has followed the Sun’s natural 11-year cycle of small ups and downs with no net increase since the 1950s. Over the same period, global temperature has risen markedly. It is therefore extremely unlikely that the Sun has caused the observed global temperature warming trend over the past half-century.

No. The Sun can influence Earth’s climate, but it isn’t responsible for the warming trend we’ve seen over recent decades. The Sun is a giver of life; it helps keep the planet warm enough for us to survive. We know subtle changes in Earth’s orbit around the Sun are responsible for the comings and goings of the ice ages. But the warming we’ve seen in recent decades is too rapid to be linked to changes in Earth’s orbit and too large to be caused by solar activity.

One of the “smoking guns” that tells us the Sun is not causing global warming comes from looking at the amount of solar energy that hits the top of the atmosphere. Since 1978, scientists have been tracking this using sensors on satellites, which tell us that there has been no upward trend in the amount of solar energy reaching our planet.

A second smoking gun is that if the Sun were responsible for global warming, we would expect to see warming throughout all layers of the atmosphere, from the surface to the upper atmosphere (stratosphere). But what we actually see is warming at the surface and cooling in the stratosphere. This is consistent with the warming being caused by a buildup of heat-trapping gases near Earth’s surface, and not by the Sun getting “hotter.”

READ MORE

• The Causes of Climate Change
• What Is the Sun’s Role in Climate Change?
• There Is No Impending ‘Mini Ice Age’
• Climate Change: Incoming Sunlight (NOAA)
• Earth’s Energy Budget Remained Out of Balance Despite Unusually Low Solar Activity

WHY WOULD YOU WANT TO TRADE STOCK OPTIONS IN USA?

Short answer: trading US options can offer more product choice, different liquidity, and potentially different tax rules, but it also comes with higher costs, currency risk, and regulatory/compliance considerations that Aus-based traders must navigate.

Key pros and cons

Access to more US-listed options and strategies

Pro: Broader universe of underlying securities and diverse strategies (e.g., index options, weeklys) that may not be available on ASX. This can expand potential setups if you’re comfortable with US market dynamics.

Con: The expansion is only valuable if you have the expertise to manage US-specific risks (earnings-driven swings, microcap liquidity issues, etc.).

Costs and friction

Pro: Some US brokers offer competitive per-contract fees (often around US$1) and robust platforms. This can be cost-effective if you trade actively.

Con: International trading adds currency conversion fees, wire/settlement costs, and possible inactivity or account-maintenance fees. Tax reporting can also be more complex.

Tax, regulatory, and compliance aspects

Pro: In some cases, you can benefit from favorable tax treatment or bilateral tax treaties, depending on your residency and the country of tax residence.

Con: You’ll be subject to US withholding, IRS reporting, and cross-border tax rules, which can be intricate. You may need professional tax advice to avoid double taxation and to understand any US-specific withholding on options profits.

Tax reporting and currency risk 

Pro: If you manage positions in USD, you can diversify currency exposure for some strategies.

Con: Currency movements can erode gains or magnify losses when profits are converted back to AUD. You’ll also need to track US dollar tax lots and potential withholding.

Operational considerations

Pro: Some brokers support international clients with integrated access to US trading hours and tools, and may offer generous demo or paper-trading environments for practice.

Con: Time-zone challenges (US market hours) can complicate monitoring and risk management from Australia. You may need to place orders pre-market or rely on routing and automation.

Practical steps if you’re considering a move

Assess your experience with US market mechanics: options greeks, margin requirements, assignment risk, and exercising rights.

Compare brokers that support Australian residents trading US options, focusing on:

Fees per contract and any monthly minimums

Currency conversion and funding options

Availability of US options across your preferred strategies

Tax reporting tools and support

Understand regulatory requirements (KYC, suitability assessments) and ensure you meet platform prerequisites for US options trading.

Plan a risk-management framework that accounts for US market volatility, earnings cycles, and currency risk.

Consider starting with a smaller, test-sized allocation or a paper-trading account to build familiarity before committing more capital.

Illustrative example

If you currently trade US stocks via an Australian broker, you might be able to transition to a US options account with similar per-contract fees but need to budget for currency conversion, potential transfer fees, and US tax compliance. This can widen opportunities, but the added complexity should be matched with a solid plan and risk controls.

Would you like me to tailor a checklist comparing specific Australian brokers that offer US options, estimate potential costs for a typical trading plan, or outline a simple transition plan from ASX options to US options that suits your Adelaide-based setup? If you share your typical monthly contract volume and your preferred strategies (e.g., calls, puts, spreads), I can produce a concrete cost estimate and risk notes.

Note: I can provide general guidance and considerations, but for tailored broker recommendations and tax implications, consulting a local financial advisor or tax professional is advisable.

If I changed, I would move to a US based platform like Interactive Brokers

Moving to Interactive Brokers (IBKR) to trade US options is a pretty common path for Australian options traders, and it changes a few things compared with staying on ASX.

Why people move to IBKR for US options

Much larger opportunity set: Thousands of US stocks and ETFs have listed options, plus very liquid index products like SPX, SPY, QQQ, IWM, etc., which simply don’t exist on the ASX in the same depth.

Better liquidity and tighter spreads: US options markets are generally far deeper, so spreads are often one or two ticks wide in liquid names, which matters a lot if you trade actively or use spreads.

Lower per-contract fees on US options: IBKR typically charges around USD 0.65 per contract for US options on standard tiers, versus significantly higher effective per-contract costs on ASX options once local broker commissions and fees are included.

More instruments and expiries: Weekly expiries, multiple strikes around the money, and a broad choice of underlyings make it easier to structure income strategies, hedges, and defined-risk spreads.

What you’d gain versus staying only on ASX

Strategy flexibility:

Easier to run wheel strategies, covered calls, cash-secured puts, verticals, iron condors, etc., on very liquid underlyings.

More expiries means you can fine-tune theta exposure (e.g., 0–7 day trades, earnings plays).

Platform and tools:

IBKR has strong analytics, risk tools, and margin simulation, which are a big upgrade from many Australian retail platforms.

Direct access to US options order routing can improve fills relative to “all-in-one” Aussie brokers.

Cost efficiency for active trading:

If you do decent contract volume, the lower per-contract rates and tighter spreads can more than offset extra friction like FX conversion.

What you’d give up or need to manage

Time-zone pain:

US regular session is overnight in Adelaide, so you either stay up, trade the open/close selectively, or accept that you won’t be watching every tick.

Managing risk around US earnings, macro events, or intraday moves is harder if you’re asleep.

Currency risk:

Your P&L is in USD; AUD/USD moves can boost or reduce your returns when you convert back.

You’ll need a plan (e.g., leave capital in USD, or periodically rebalance) rather than converting in and out constantly.

Tax and admin complexity:

You’re an Australian tax resident trading US products, so you must deal with US forms (e.g., W‑8BEN) and then report everything properly in Australia.

Options are still taxed under Australian rules, but source-country treatment and withholding can be non-trivial, so most serious traders get tax advice.

Product familiarity:

US index options (e.g., SPX) have their own contract specs, settlement styles, and tax characteristics that differ from stock options.

More choice can encourage overtrading if you don’t have a very clear playbook.

IBKR specifically for an Aus-based options trader

ASX and US on one platform: You don’t have to “leave” ASX – you can keep trading ASX ETOs and add US options in the same IBKR account, with comparatively low ASX ETO fees as well.​

Very low headline commissions:

US options: around USD 0.65/contract on typical schedules, with a USD 1 minimum per order, and tiered pricing can go lower at higher volume.

ASX options: IBKR Australia advertises very low per-contract ASX ETO fees (cents per contract) plus exchange fees.​

FX costs: IBKR’s FX spreads are generally tight compared with many Australian brokers, but you still need to think of FX as a trading cost and P&L risk, not a free side-effect.​

Are you “missing out” if you stay on ASX only?

You are missing out on:

The huge US options universe, especially liquid index and ETF options.

Typically tighter spreads and lower commissions per option.

The ability to run more nuanced income and hedging strategies across many sectors and indices.

But staying ASX-only avoids:

Overnight screen time and US event risk while you sleep.

Currency risk and FX admin.

Extra tax and compliance complexity as a cross‑border trader.

A practical way to decide:

Keep your existing ASX setup for now.

Open IBKR, fund it with an amount you’re comfortable treating as a “US options sleeve,” and run your usual strategies in parallel for 3–6 months.

After that, compare:

Net P&L after all fees and FX.

Hours of sleep/stress.

How often liquidity or spreads materially changed your outcomes.

If you tell me roughly what you trade now (covered calls, short puts, spreads, typical contract size per month), I can sketch how your all‑in per-trade cost and practical lifestyle trade‑offs might look on ASX vs IBKR US.

Tax implications for Australians trading US options on IBKR

Australians trading US options on Interactive Brokers (IBKR) face primarily Australian tax obligations, with some US withholding rules, but no US tax return is typically required for non-US residents. Here’s a breakdown based on standard practices for your situation.

Key Tax Forms and Withholding 

Complete and submit a W-8BEN form via IBKR to certify your non-US status. This reduces US dividend withholding from 30% to 15% under the Australia-US tax treaty, though pure options trading (e.g., buying/selling contracts without dividends) usually avoids dividend withholding altogether.

Australian Tax Treatment

All gains and losses from US options are treated as capital gains or losses (CGT events) under Australian rules and must be reported on your ATO tax return as part of worldwide income. Options profits qualify for the 50% CGT discount if held over 12 months, but most options trades are short-term and taxed at your marginal rate; convert all USD amounts to AUD using RBA exchange rates on trade dates. IBKR provides detailed activity statements and tax reports to help with this, covering the Australian financial year (July-June).

US Reporting and Credits

No IRS filing is needed unless you have US-sourced income triggering it (rare for options). Any US withholding (e.g., if options settle into dividend-paying stock) can be claimed as a foreign income tax offset (FITO) on your Australian return to avoid double taxation. Track everything carefully, as FX fluctuations impact CGT calculations.

Potential Pitfalls

Estate tax risk applies if US holdings exceed USD 60,000 at death (options count as US-situs assets), so consider mitigation like trusts. Frequent trading might classify you as a “trader” for ATO purposes, affecting deductions, and foreign asset reporting kicks in over AUD 50,000. Always consult a tax advisor for your specifics.​

Follow-ups

How are options trading profits taxed in Australia

Do US options have withholding tax for Australians

How to report US options capital gains on ATO return

ATO CGT discount for US options trades

Best way to track US options taxes on IBKR

Trading seems so simple. After all, a price can only go up or down so all traders have to do is pick the right direction then sit back and wait for the money to roll in, right? Well, not quite.

The trading world can be full of surprises for those who have big ideas but little in the way of preparation. When ill-prepared traders won’t recognise that mistakes in trading are all a part of the learning process and can actually shape a person into becoming a successful trader.

There’s no doubt, most traders – if not all – will make or are still making the same mistakes.

Making trading mistakes is part of every trader’s journey. Whether someone is completely new to trading or has been trading the markets for decades, chances are they will make some common trading mistakes.

Some of these mistakes are more costly than others. And the fact is there are some mistakes that are hard to accept. For some traders, ignoring a mistake and repeating it over and over again can spell the difference between becoming a successful trader or losing one.

1. Trading without a trading plan

Every trader needs a trading plan. If they don’t have one, it’s time to get one and the best place to start is by thinking about why you’re trading.

Is it because they want to earn a bit of extra money on the side of their regular job?

Do they want to make a career out of tracking the stock market?

Is it just something they’re doing for a challenge?

Whatever the reason may be, the goals will help dictate the way a person trades.

Traders need to think about what they really want to get from trading and then work out how to get it. Consider the amount of time available to dedicate to trading, the types of trades to pursue (e.g. high volume, low profit), and whether the level of knowledge is sufficient or if more time is needed on education.

2. Trading too much, too soon

Due to the potential to earn money from trading the temptation, especially for new traders, is to push limits in the hope of getting greater profits quickly.

But going into trades too enthusiastically – either in volume or value – only serves to raise your level of risk. If you overreach and things go against you, you might bounce yourself out of the market before you’ve even had a chance to settle in. Too many people enter the trading markets with the idea that it’s going to set them on a fast path to millions.

The reality is that trading isn’t the kind of thing where you casually throw in a bit of money and get untold riches in return – it takes a lot of skill and patience to get anywhere near those lofty heights.

Build slowly and steadily. Test things out with a demo trading account first, then once you open a live trading account with real money, invest a small amount and trade in one or two markets to get a feel for things.

Traders can make a profit from forex trading, stock trading, commodity trading, and more, but it rarely gets made on a handful of quick trades.

The more time traders are able to dedicate to trading, the better they become, the easier they find it, and the more trading opportunities reveal themselves.

3. Emotional trading

We’ve all experienced that feeling when you’re on a good run and feel like you can’t do anything wrong. When traders apply that to trading, it’s generally when you experience a sequence of profitable trades and you feel like you’ve mastered it. But all good runs eventually come to an end and it’s crucial to remember this because, ultimately, it’s money at stake.

It’s good to be excited about trading and confidence is always a welcome characteristic, but don’t let emotion dictate trading behavior and push you into positions you wouldn’t normally take.

Try to temper emotional trading mistakes. Before launching into a trade, take half a step back and try to look at it objectively. Does it fit the trading strategy? Are you doing it based on sound information or just a gut feeling? How would you react if the trade went against you?

Come up with a system of cues that will help you protect yourself from too much emotional investment.

4. Guessing

If traders enter into a trade without doing any preparation, they’re not really a trader.

In fact, trading without putting any effort towards education or understanding how the markets work is more like walking into a casino, throwing some money on the roulette table, and hoping for the best. While it’s true that there’s an element of unpredictability and volatility inherent to trading, by spending time learning and observing how the market works, traders can form an idea about the types of trades best suited to them.

Educate yourself and be prepared before every trade.

5. Not using a stop-loss order

Trading without using a stop-loss level is like driving a car without breaks. It’s too dangerous.

But despite that, many traders still trade without using this useful tool. And in most cases, it ends up in painful losses. Unnecessary and avoidable losses.

If you use a stop-loss level properly, you can avoid getting too deep into a losing position.

Whether you want to put a ‘hard’ stop-loss as soon as you enter a trade, or you have a ‘soft’ stop-loss level in front of you as you trade, you will be in a better position if you use this as part of your risk management. Just remember that soft stop-loss levels are more suitable for advanced traders who have experience in these markets.

6. Taking too big positions

There is no doubt the attraction of a big winning trade is on every trader’s mind. And the temptation to take a big position (thinking it will be a winning trade) is always present. Money management for traders is essential to keep them in the markets.

But as proven time and time again, taking too big a position on a trade can be risky. There is no guarantee the trade will go the way you want it to go. So, if you risk 50% of your capital in a single trade and that trade turns against you, it will seriously decrease your trading capital.

And it may also take a big psychological toll on you as a trader. It’s important to learn position sizing techniques to help reduce the amount of risk and develop a sound approach to entering and exiting trades.

7. Taking too many positions

While there are many markets to trade and numerous trading opportunities every day, taking too many positions may also be detrimental to your trading.

Unless you have a robust and automated trading system that automatically places trades for you, monitoring too many positions can be confusing and high-risk, to say the least.

Remember the human brain can only deal with a limited amount of information at a time. And the attention needed for each trade means you have limited time and focus to give each trade.

If you take too many positions at one time without the proper automated systems to monitor them, chances are some of those trades will fail.

So, next time you’re trading, be mindful of the number of trades you’re taking. It is best to focus on a few trades first – enter and exit them – then start again if other trading opportunities arise.

When you have a clearly defined trading strategy, filtering through the trade opportunities that become available and picking the best ones will be a little easier.

8. Overleveraging

The ability to use leverage is one of the main attractions to markets like forex, indices, precious metals, and cryptocurrencies. Leverage allows you to trade a much bigger position even with a smaller amount of trading capital.

But as we all know, leverage can be a double-edged sword. It can amplify both winning and losing trades.

One of the cardinal sins of traders – particularly of those who don’t fully understand how leverage works – is to use a high level of leverage. Some people only see potential wins and ignore potential losses.

If you use a high level of leverage and the trade turns against you, this could result in a total wipe out of your trading capital.

So, the best way to use leverage is to start low. Try using the lowest level of leverage offered by your trading provider. Once you are more comfortable with how leverage works, then you can increase the leverage level if you like.

The thing to remember is that just because there are larger amounts of leverage levels on offer – leverage can range from 10:1, 50:1; 100:1; 200:1, or 400:1 depending on your jurisdiction – it doesn’t mean you have to use the highest level possible.

As the saying goes, you need to walk first before you can run.

9. Revenge trading

Don’t you hate it when you lose? And don’t you just want to get back into the market, take another trade, and prove you can be a winner?

That’s exactly the thinking behind revenge trading. You want to get even. You want to prove you’re a winner.

But most of the time revenge trading can bring more pain than gain.

Consider this for a moment. When you get into a revenge trade, you’re most likely not in the best emotional state. You’re most likely still seething or too stressed out to make a sound trading decision. And most likely you haven’t really analysed the next trade – whether it has good potential or not.

So, the best thing you can do about revenge trading is not to get involved with it at all.

If you have a losing trade or a string of losses, it is better to step back and analyse what went wrong.

Was the market too choppy to trade anyway? What went wrong with your initial analysis?

Most of the time, if not all the time, it’s best to avoid revenge trades at all costs.

10. Letting profitable trades turn into losses

If you’re making this mistake, you’re not alone. Even the big guns are guilty of this common trading mistake.

How many times have you perfectly timed your entry, seen a nice paper profit, only to see it vaporised by a sharp reversal? I’m going to bet more than once.

Letting a good trade go bad is the first major mistake you can make trading the financial markets, but there is light at the end of the tunnel.

The best way to correct this mistake is planning. You should know when you are going to exit before you enter into the trade. And you should have multiple reasons to exit.

Traders need to develop their own trading exit strategies that allow them to achieve an objective from the trade – even if it does not go exactly as they might have hoped. This can include a combination of:

Profit target(s)

Wide trailing stop (for trending markets)
Tight trailing stop (for fast exhaustion moves)
Risk/reward stop (for when you get close to your profit target)
You can also scale out of your trade. Take a bit of your position off when the market makes some available, take a bit more as the move progresses, and leave some on for the big wins. This type of approach will help you to smooth out your equity curve.

Finger pointing at a trading chart that is going down

11. Not tracking trades in a trading journal

Using a trading journal is a very critical part of becoming a successful trader. It isn’t as simple as recording your entry and exits for profitable trades, it requires a bit more information and attention.

Your trading journal should include all trades, good, bad, and even really bad ones.

Some types of information that should be recorded in a trading journal include:

Date and time of trade
What instrument is being traded
Screenshots of the chart setup when trade was entered
Position size
Your thoughts and reasoning for entering the trade
By having a trade journal available to you, you’re able to go back and review your successful trades and trades that weren’t so successful to highlight opportunities in your trading strategy where you can improve.

12. Don’t forget about your investment time horizon

Investing without a time horizon in mind can set you up for failure. This is because all investments are either long-term or short-term, and they will have different rates of return depending on the length of your investment.

For example, stocks that perform well over long periods but not so much during shorter ones may make sense to hold onto when considering retirement savings.

When you understand your time horizon, you can better match the right investments to your portfolio.

13. Being able to accept losses

Many traders are under the impression that they can’t make mistakes like investment professionals, but this is simply not true.

If you jumped into a trade without doing your due diligence or you’re a long-time earner and your portfolio has suddenly taken a dive, it’s important to accept what happened and move on instead of letting your pride control your trading style, and hold onto those losers longer.

There is always going to be another day and another trading opportunity. Learn from those previous losses to continue improving your skill set on the way to becoming a successful trader.

14. Following the crowd

Following the crowd is a common trading mistake where inexperienced traders blindly follow the herd mentality, finding themselves in detrimental trades.

It’s important for novice traders to think about their own trading style when making decisions so that they don’t jump into trends without conducting their own research and without understanding why it might work out better for them. If you enter into a trade by following someone else without performing any technical or fundamental analysis and a trade loses, you only have yourself to blame.

Group of business men looking in the same direction

15. Trading in multiple markets at once

Inexperienced traders may jump from market to market – from forex to indices and cryptocurrency to commodities. This is a common mistake and it can lead to over-trading and significant losses.

Getting a better understanding of a market is important for traders of all levels so that trading decisions are based on facts instead of gut feelings or emotions. Before branching out, it is wise to come to grips with one market and gain valuable trading experience before jumping into multiple markets at once.

16. Chasing markets with strong past performance

It’s common for many traders to select a particular asset or market that has seen strong past performance over the past couple of years. This ‘Fear Of Missing Out’ mentality has probably caused more negative investment decisions than positive ones.

The market that has been performing well for those few years may well be nearing its end, with all the smart money being moved out and the traders making the mistake (the dumb money) pouring in.

Traders need to understand the best time to have invested in that market was three or four years ago, not now.

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This information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. It has been prepared without taking your objectives, financial situation, or needs into account. Any references to past performance and forecasts are not reliable indicators of future results. We make no representation and assume no liability regarding the accuracy and completeness of the content in this publication. Readers should seek their own advice.

No, the UK isn’t threatening to seize babies over digital ID

WHAT WAS CLAIMED

The UK government is introducing mandatory digital ID for babies and parents who refuse will face having their children seized.

OUR VERDICT

False. The UK government has not announced plans to extend digital ID to babies under the penalty of child seizure.

AAP FactCheck – The United Kingdom has not threatened to seize babies from parents who refuse to sign their children up for a digital ID scheme, despite social media claims.

While British tabloid The Daily Mail recently reported¹ on cabinet talks about extending digital ID to babies, it is not UK government policy and there are no suggestions that officials are threatening to seize children under a mandatory scheme.

The UK government announced plans² for a mandatory digital ID scheme for right-to-work checks last year to curb illegal employment. However, it has since said the scheme won’t be compulsory.

The false claims have spread across Facebook and Instagram.

A widely shared Instagram video³ posted on January 6 shows a man describing the purported policy.

It includes a partially cropped caption suggesting the digital ID scheme is mandatory for newborns and that the UK government will seize children if parents don’t comply.

“They’re literally saying if you have a child and you don’t get them a digital ID then they will take your child,” the Instagram user says in the video.

“The nerve that these people have to say that they will do that is absolutely astonishing and the sad thing is that so many people are gonna fall for it.”

The cropped caption in the Instagram video matches one contained in a viral Facebook post⁴ from January 4 that claimed the UK announced digital ID for babies.

“UK plans mandatory digital ID for newborn parents who refuse face jail and child seizure,” the caption reads.

UK Prime Minister Keir Starmer announced plans to introduce a digital ID system in September last year, with the government originally saying⁵ it will be required for right-to-work checks.

However, in January media reports said⁶ digital ID will not necessarily be mandatory for employment, but that existing ID requirements will be moved online by 2029.

This means people will still be able to use documents like passports for right-to-work checks, but they will need to upload them to the internet, according to a BBC report.⁷

The government hasn’t unveiled plans to expand the scheme to newborns, though a report in The Daily Mail⁸ on January 1 cited an unnamed source saying that proposal was discussed in a cabinet meeting.

There was no suggestion in the story that the government discussed seizing the children of parents who refused to sign their babies up to an expanded digital ID.

A government spokesperson told the tabloid it only proposed mandatory digital ID for right-to-work checks and in a hypothetical situation where children may be able to obtain digital ID, it would not be mandatory.

AAP FactCheck is an accredited member of the International Fact-Checking Network⁹. To keep up with our latest fact checks, follow us on Facebook, Instagram, Threads¹⁰, X, BlueSky¹¹, TikTok¹² and YouTube¹³.

Sources

1. https://web.archive.org/web/20260101075712/https://www.dailymail.co.uk/news/article-15409993/Newborn-babies-given-Digital-ID-deeply-sinister-expansion-controversial-Labour-policy.html
2. https://www.gov.uk/government/news/new-digital-id-scheme-to-be-rolled-out-across-uk
3. https://archive.md/NoyOf
4. https://archive.md/wip/PMDDO
5. https://www.gov.uk/government/publications/digital-id-scheme-explainer/digital-id-scheme-explainer#:~:text=It%20will%20also%20be%20required%20for%20right%20to%20work%20checks%20to
6. https://www.theguardian.com/politics/2026/jan/13/government-rolls-back-digital-identity-card-plans#:~:text=UK%20government%20rolls,will%20launch%20shortly.
7. https://www.bbc.com/news/articles/c3385zrrx73o
8. https://web.archive.org/web/20260101075712/https://www.dailymail.co.uk/news/article-15409993/Newborn-babies-given-Digital-ID-deeply-sinister-expansion-controversial-Labour-policy.html
9. https://www.poynter.org/ifcn/
10. https://www.threads.net/@aapfactcheck
11. https://bsky.app/profile/aapfactcheck.bsky.social
12. https://www.tiktok.com/@aapfactcheck
13. https://www.youtube.com/playlist?list=PLI1hQghM1xMcPnn2UOZ1hBqBqurt9GT4I

Fact-checking is a team effort

Every AAP FactCheck article is the result of a meticulous process involving numerous experienced journalists and producers. Our articles are thoroughly researched, carefully crafted and rigorously scrutinised to ensure the highest standard of accuracy and objectivity in every piece.