KOSPI options

kiwi_trader · Dec 9, 2005

Aus so it fits nicely with SGXNK and HSI

fengshui-123 · Dec 9, 2005

which on-line brokers offer this?

just21 · Dec 9, 2005

Interactive brokers for non-us residents. CFTC restricted.

BlueHorseshoe · Dec 9, 2005

Quote from MTE:

Hi,

Would anyone be kind enough to elighten me why KOSPI 200 options are the most liquid ones in the world?

I mean, what is so attractive? Or do they have a special deal going there....trade 10,000 option contracts and you get a car or something?

Cheers.

One reason is that the basis value of the contracts are so small - like trading 20 nickels vs 1 silver dollar.

Imagine reducing the size of ES options and commissions by 10 - trading volume goes up exponentially.

Also, ticks on the options are miniscule.

Bottom line, the contracts are simply well constructed to facilitate volume.

A second reason is that Korea is extremely hardwired to the internet, and to online trading. (Makes US almost look third world, to be frank.) It is prevalent to a degree that would be shocking to most westerners who haven't been exposed to that phenomenon.

Taiwan is similar, but not as prevalent as online trading is relatively new there and locally-listed futures are only a few years old.

MTE · Dec 10, 2005

Interesting.

Very informative! Thank you all for your contribution!

Good trading!

BlueHorseshoe · Dec 10, 2005

Quote from MTE:

Interesting.

Very informative! Thank you all for your contribution!

Good trading!

I would also add that commissions on options are tied to the option price (?) - it is not a per-contract charge. Thus buy an option for 0.35 and pay half the commission than if you pay 0.70 contract closer to the money (or longer horizon.)

This makes trading the deep OTM KOSPI contracts more attractive than trading similar contracts on other indices.

That's the way I think it works ... happy to stand corrected. Has IB come out with commission rates yet? This could be a whole new animal for them.

IMO KOSPI futures/options are the best-constructed in the world, except that they are not traded out-of-hours, which is essential.

LoosenUp · Dec 10, 2005

Any idea what kind of volatility are these options traded at?

wilburbear · Dec 10, 2005

Quote from MTE:

Hi,

Would anyone be kind enough to elighten me why KOSPI 200 options are the most liquid ones in the world?

I mean, what is so attractive? Or do they have a special deal going there....trade 10,000 option contracts and you get a car or something?

Cheers.

They actually teach technical analysis on TV in South Korea.

aestreux · Dec 11, 2005

i traded them for awhile in korea. a rollercoaster, powerful moves, liquid. fastest and easiest way to make/lose money in the markets there. no taxes for korean citizens.

i play currencies now and the kospi 200 options is a similar game.

ids · Dec 11, 2005

To BlueHorseshoe:
IB commissions are published at
http://www.interactivebrokers.com/en/accounts/fees/commissionStockIndexOptions.php?ib_entity=llc

0.2% of option value
Minimum per order is KRW 1,000
Example: 10 Contracts @ KRW 0.75 Premium (KRW 100,000 Multiplier) = KRW 1,500
It is less then $1.5