Exchange Traded Options (ETOs)
Equities (Stocks, ETFs & Warrants)
A standard trading account with OpenMarkets allows you to trade ASX, NSX or SIM VSE Equities i.e. Stocks, ETFs and Warrants. To trade in Exchange Traded Funds (ETFs) or Warrants, you’ll need to check the applicable box on the Account Application or download the ETFs/Warrants Agreement.
What are Stocks?
Stocks are ownership or equity in a company issued in the form of shares, which represent a portion of a company’s assets and earnings (capital).
What are Exchange Traded Funds (ETFs)?
ETFs are investment funds listed on a stock exchange, which can be bought and sold like Stocks. They can be a low-cost way to diversify your portfolio as they can hold assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of a trading day. In Australia all ETFs are ‘passive’ that typically track assets or a market index up or down, such as the ASX Top 200. However some ETFs are more complex and risky than others.
For more information, we like how ASIC’s Money Smart website explains ETFs
What are Warrants?
Warrants are a type of investment product often issued by a bank or financial institution that can be traded on the ASX, like Stocks and ETFs. Often referred to as the stockmarkets’ equivalent of lay-by, Warrants are by nature speculative, as it allows you to lock in the price of an asset today, e.g. stocks, for a purchase sometime in the future. There are two common types of Warrants:
- Ordinary Warrants – allow you to put a deposit on a parcel of shares today (and lock in a price) for payment in the future
- Instalment Warrants – allow you to put a down payment on shares today and pay the outstanding amount in one or more instalments later on.