Options trading is rightly seen as potentially involving a scaling up of risk-return, but the derivative instruments were initially developed to mitigate risk. Singapore traders who brush up on how they work can pick how to fit them into their investment strategies. The good news is that several reputable brokers have upgraded their offering of options markets to include options trading of indices, single-stocks, forex, bonds and commodities. When handled with care, they can be part of a portfolio's income stream.
Saxo Markets has a strong reputation as a trustworthy multi-asset broker, and the range of options markets on offer is market-leading. All asset groups are covered, and the maturity dates are super-flexible. The fees and commissions and margin T&Cs allow for cost-effective option trading, whether you want to use the instruments to hedge or scale up on risk.
Institutional as well as retail investors use the proprietary trading platform. It offers a high-grade trading experience, and it can only be found at Saxo.
Singapore office: Saxo Capital Markets Pte Ltd. 3 Church Street, #30-00. Samsung Hub Singapore 049483.
Saxo Capital Markets Pte Ltd (‘Saxo Markets’) is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M] and is a wholly-owned subsidiary of Saxo Bank A/S, headquartered in Denmark.
IG offer more than 17,000 markets, so it’s little surprise its coverage of the options market is up there with the best in the sector. The firm’s high ranking is supported by a comprehensive range of features, including a range of underlying instruments, maturity date terms and types of options available. The Turbo warrants market is a neat addition, and those markets come with a stand-alone platform dedicated to making the most out of that sector.
The T&Cs have been simplified with ‘all in’ pricing making it easy for clients to factor costs into their strategic planning. Then there are the trademark additional extras IG offers, including award winning client support and trade-orientated research tools, which all go together to mark IG out as one of the best option trading platforms in Singapore.
Singapore office: IG 9 Battery Road #01-02 MYP Centre Singapore 049910
IG Asia Pte Ltd (Co. Reg. No. 200510021K) holds a capital markets services licence issued by the Monetary Authority of Singapore for dealing in capital market products that are over-the-counter derivatives contracts. It is an exempt financial adviser.
As the name suggests, IQ Option is a specialist provider of options markets. The firm has been operating since 2013 and being a relatively new entrant into the space means the platform’s functionality has a more modern feel than that found at some other brokers. There is also a range of neat, innovative features, including the mobile phone App, one of the broker’s biggest selling points. IQ Option is an ideal broker for beginners and those looking to keep their trading of the markets as straightforward as possible.
IQ Option in Europe operated by: IQOption Europe Ltd, Registration No. HE327751, Address: Yiannis Nicolaides Business Center, Agiou Athanasiou Avenue 33, 4102, Agios Athanasios, Limassol, Cyprus
IQ Option is located on the island of Cyprus. It is regulated by the Cyprus Securities Market Commission, authorised by the EEA and registered by the FCA in England, the Italian CONSOB and the Spanish CNMV.
AvaTrade is a well-regulated broker with a global approach. Clients can take comfort from the firm’s long-term business plans that include setting up bricks-and-mortar offices worldwide, including at Hansapoint, Singapore. The AvaOptions platform is an in-house built platform developed to help clients make the most out of derivatives trading. The broker is a market leader in the sector with a solid position in the Vanilla Options market.
Registered address of Singapore office is 10 Changi Business Park Central 2, #04-10 Hansapoint @ CBP, Singapore 486030
AvaTrade is certified to the requirements of EN9120:2018, ISO9001-2015, ASA-100 & AC00-56B and Authorised Economic Operator (AEO) standards
AvaTrade is an online Forex/CFD trading broker founded in 2006 and regulated worldwide. Headquartered in the Republic of Ireland, it has a corporate structure consisting of several locations that match the largest volume of regulated trades: Australia, Japan, South Africa and the British Virgin Islands
Options markets fly under the radar of some traders and investors. The perception is that they are too risky. While that can be the case, it's more down to how people treat them than inherent risks. If buying options, the maximum loss on the trade will be the premium paid when the position opened.
Trading options in their own right is one way to increase leverage terms effectively. The brokers listed above provide educational and research materials to help their clients understand the different strategies and risks involved. Using options to hedge positions in the underlying asset, such as an equity or index, is in line with how the options markets came about to help traders scale back on risk return.
The market risk associated with options trading needs to be considered alongside the operational risk of trading them. You are exposed to price moves in an underlying market if you buy an option, but you don't own the actual underlying. That means your broker must be in good enough health to be around to pay out if your strategy is a winning one. Also, factor in that some option strategies can take 12 months to come good. It's no surprise then that those looking to trade options have tended to head to platforms of established brokers such as IG, AvaTrade and Saxo.
The shortlisted firms able to put their names forward for the title of the Best Options Platform in Singapore have all set about doing the right thing in terms of regulatory approval. All are regulated by at least one Tier-1 authority, which means high protection levels for account holders. No one will offer guarantees that your investment will go up in value – that's not how the markets work. But the listed advisors have set themselves up to be considered safe by MAS, FCA, CySEC or ASIC.
Customer protection features vary from regulator to regulator, and it's recommended some of the below features should be provided by platforms that make your shortlist.
The process of gaining regulatory approval takes time and money. Once licensed, firms then have to continue to demonstrate they are operating in line with the terms and conditions of their licence, and the reporting required is another expense. Any transgressions can leave the firm open to warnings, fines, and reputational risk, which all adds up to the end-user being able to take some confidence that a platform is being well-regulated. Any firm willing to become regulated will not only be open to higher levels of scrutiny but will also have a well thought out business plan designed to make the most out of it being seen as legitimate.
Those new to options trading will find they are stepping into something of a different world but in a good way. The functionality of options allows traders to gain exposure to a range of underlying asset markets but with a subtle twist. Signing up with a good broker, one that translates some of the jargon into easy-to-understand terms, will find they break through some of the mystery of the markets. Once that is achieved, the usefulness of options becomes apparent. Whether you trade options outright or as part of a diversified portfolio, the options market can offer flexibility and functionality not found in other asset groups. That is undoubtedly part of the reason for their increasing popularity.