I remember seeing knockout options on IG when I started using their platform years ago, but never bothered with knowing what they were. It doesn't look like they exist anymore there, possibly due to EU regulations. But I suppose it wouldn't have been useful as a proxy for buying small numbers of long term AMZN options (or even the medium priced NVDA) anyway, which is what I want to do now.
@bermondsey Sorry i'm a newbie. how posisble with 165 pounds . for any options you need to pay the full premium right .do you mean by spread betting ?
In spreadbetting, instead of actually owning something, you place a bet on the direction you think the market is likely to take. For example, on IG, the SPX (referred to as US 500) is currently around 3350 'points'. I can place a 'buy' bet of 1 GBP per 'point' (or 'sell' if I think the market will go down). I don't know how it all works behind the scenes but I believe IG matches me up with others who take my opposite position, or something equivalent. Even if it's a share that I would otherwise have to buy in dollars (eg INTC, probably quoted at 4800 points on IG right now), I can still bet the market direction in GBP. It's legally classed as gambling in the UK, and therefore there are no taxes (since there is no net benefit to the tax agency (HMRC) since any tax received from the winners would be offset by the taxes refunded to the losers). Now, when it comes to options, I can bet on a US 500 option that costs 50 dollars right now, but that would be quoted on IG as 50 'points', and I can bet with either $ or GBP per point. for example, buying 1 USD per point, is effectively buying a single option for 50 USD (If I bet with 1 GBP per point instead that would be 1.3 options based on current GBPUSD rate). If you want to simulate buying an entire contract you would have to buy 100x points in USD. So, you can trade in very small amounts, but I guess most people do it to get large exposure with small money (hence the potential for large gains/losses) that you put up as margin (in the case of stocks and indices). In the case of buying options though, your margin would be more or less equivalent to the full price of the option. You can also trade markets that would otherwise be inaccessible, and in some case after hours too. This is all very neat, but IG simply don't have options for stocks, at least not on their online platform.
Okay, I thought, you asked 'what do you mean by spread betting?'. I might have over-explained it a little bit!
Thank for the explanation. I have seen this in Interactive Broker . But spread betting price seems more or like equal to a option price and so the capital required is equal to option. Am I missing something in this .