A futures contract is a legally binding agreement made between two parties to buy or sell a commodity or financial instrument at an agreed price, on a specified date in the future. With futures contracts, the details of the underlying commodity are specified and the future delivery date is fixed. The price is the only variable and is determined through the interaction of buyers and sellers at the time when the contract is first opened.
You can trade all the financial products listed with SFE, of which some key products are SFE SPI 200™ Index Futures, Individual share futures, SFE 3 Year Bond Futures, SFE 10 Year Bond Futures, SFE 90 Day Bank Bill Futures and Exchange traded futures options.
SFE SPI 200™ Index Futures are the benchmark derivative products for investors trading and hedging in the Australian equity index market. SFE SPI 200™ Index Futures enable you to trade movements in the S&P/ASX 200 Index in a single transaction, thereby allowing exposure to Australia's top 200 companies without having to buy or sell shares in every company in the index.
On the SFE several option contracts are traded over futures contracts (commonly known as futures options). For the buyer a future option is the right, not the obligation, to enter into a futures contract at the exercise price of the futures option granted in return for a premium. Looked at from the seller’s viewpoint the seller has no right as such (other than a right to the premium). The seller will be under an obligation to enter into a futures contract at the exercise price of the futures option if the option is validly exercised. Like futures contracts options are standardised so that having bought an option it is possible to sell it later to a third party and vice versa.
The minimum allowable price move in a futures contract is called a 'tick.' For example, the minimum 'tick' move in the SPI contract is 1 index point, which currently has a value of A$25.
If you are trading SFE Futures, you may electronically transfer money into the Client Segregated Account (the details of which are below), clearly referencing it with the trading account number that has been assigned to you by Morrison Securities. If you haven't been issued a trading account number as yet, please reference the transfer with your full name.
Account Name: Morrison Securities Pty Ltd – Client Segregated Account
Bank: Commonwealth Bank of Australia
BSB: 062 000
Account: 1231 8880
Contract unit refers to the quantity of the underlying instrument/commodity that the futures contract is based upon. For example, in case of Share Price Index (SPI(R)) futures, the contract value is currently fixed at A$25 x All Ordinaries Index.
As futures contracts essentially represent agreements to buy or sell in the future, investors are able to trade in many different delivery months, e.g. in April you could trade SPI contracts for June, September, December, and in March the following year, and so on. The contract that is closest to maturity (in this example the June contract) is known as the spot month. The other months listed are called forward months.
Futures contracts can be settled either by the exchange or delivery of the underlying commodity or else in cash. In cash settled contract, the holder of the futures contract either receives or pays the difference in cash value between the traded price and the closing futures price. In a deliverable Contract however, the actual transfer of the underlying commodity, takes place between the buyer and seller.
All trading in expiring contracts ceases at 12.00pm on the Third Thursday of the
settlement month, unless specified otherwise. Non-expiring contracts will continue to trade as per the stated trading hours.
Yes, future contracts can be bought/sold before expiry. For example, Although the futures contracts purchased were due to expire at the end of June there was no requirement for the trader to hold the contracts until this time. Once opened, a futures contract can be liquidated by the trader at any time (i.e., weeks, days or even minutes after it is first opened). To do this, the trader would simply sell June SPI futures back into the market to offset those originally purchased.
Variation or settlement margins, as they are otherwise known, are payments that must be made to cover price movements that occur in the market once a position has already been established. For example, a client would have to pay a variation margin on a bought futures position in the event that the market price for that commodity fell after the position was first established. Alternatively, if the market price rose, the client would receive a variation margin payment with the proceeds being credited to the account.
Variation margins must be paid and received on a daily basis. During times of extreme volatility, it is even possible for these margins to be called on an intra-day basis.
If an Investor not been able to meet his variation margin requirements, a broker may liquidate the client's position. The money owed will then be deducted from the initial margin monies that are refunded to the investor.
A CFD (Contract for Difference) is an agreement between a buyer and a seller to exchange the difference in value of a particular instrument between when the contract is opened and when it is closed. The difference is determined by reference to an ‘underlying’ – a share, index, FX rate or commodity and the period over which the CFD is held. CFDs are leveraged instruments. This means that you are fully exposed to price movements of the underlying instrument without having to pay the full price of that instrument.
You can open your account either by downloading, completing and sending us the necessary forms and supporting documents, or by completing the online form and then sending it along with the supporting documents. You will also need to send us documents for a 100 point ID check. Please refer to our Forms section for details
If you are trading via htmlIRESS, a minimum balance of $5,000 is needed to open a trading account. For trading via webIRESS or over the phone, no minimum balance is required.
For Equities and Options trading accounts, you may electronically transfer money into our trust account (the details of which are below), clearly referencing it with the trading account number that has been assigned to you by Morrison Securities. If you haven't been issued a trading account number as yet, please reference the transfer with your full name.
If you are trading SFE Futures, you may electronically transfer money into the Client Segregated Account (the details of which are below), clearly referencing it with the trading account number that has been assigned to you by Morrison Securities. If you haven't been issued a trading account number as yet, please reference the transfer with your full name.
Account Name: Morrison Securities Pty Ltd – Client Segregated Account
Bank: Commonwealth Bank of Australia
BSB: 062 000
Account: 1231 8880
Please contact our office and inform us of the details of your transfer which would be looked into and verified and if found correct, would be credited to your account. The whole process will be charged as per the schedule of fees applicable at that period of time.
Please contact our office and inform us of the details of your transfer which would be looked into and verified and if found correct, would be credited to your account. The whole process would be charged as per the schedule of fees applicable at that period of time.
Your funds will be held in our Trust Account or our Client Segregated Account (for SFE Futures). Cheque deposits normally take 5 business days before the funds are available for trading, electronic transfers such as internet transfers are cleared quicker, usually taking 2 business days.
Please send us an email (morrison.admin@morrisonsecurities.com) or fax (+61 2 9033 8300) providing us with instructions to transfer the relevant amount to your bank account, along with the details of your account (Bank name, BSB, account name and account number). All requests received by 10:30 am would be processed on the same day, subject to availability of cleared funds in your trading account.
Cash Market (Equities)
Orders can only be placed during trading hours. Orders placed via the phone outside trading hours will be queued to be entered in the market during the next trading session.
Options
Orders can be placed only during trading hours. Please note that Option orders are day-only orders.
We normally send out the confirmations by email. However, if you would like a copy of the contract note by mail, an extra fee (as per the schedule of fees) will be charged per contract note.
Placing a sell order over the Internet is only allowed for stocks/Exchange Traded Options that you currently own. There are no short selling facilities and your order will be denied if you place a short selling order. However, you can write Exchange Traded Options by placing your orders over the phone.
You may exercise all American Options on or prior to the expiry date. Please contact us by email (morrison.admin@morrisonsecurities.com) or fax (+61 2 9033 8300) for the same before the end of trading session. Please note that the Options will be exercised only if you have the corresponding cash/holdings to support the trade. On expiry, all "in-the-money" Options will automatically be exercised.
Contingent Orders are orders that facilitate the automatic generation of a market order when pre-defined and specific market conditions are met. For example, we can have a Contingent Order specifying that a market order to buy 500 XYZ @ 200 should be created if XYZ trades at 190.
Please note that once the trade is executed (be it fully or partially traded), it will cease to be visible in the Contingent Orders command.
Under the "Forms" section on our website, you will find a form to transfer your holdings/positions to Morrison Securities. Once we receive the completed form, we will contact your current broker and get your holdings/positions transferred. Alternately, you can also instruct your current broker to transfer your holdings/positions over to Morrison Securities.
If you just transfer you holdings/positions individually, you will receive a new HIN number. But if you choose to transfer the entire HIN (with all your holdings) across, your HIN number will remain the same.
When filling the application form, please indicate the desired trading platform you wish to use. As soon as the application has been processed, we will provide you with username and password to access the package and trade online.
To log in, simply type your user ID and password in the respective fields provided on the Morrison Securities Homepage. Please make sure that there are no spaces between each character and that the "Caps Lock" light is off (input is case sensitive).
Yes, both our trading platforms (webIRESS and htmlIRESS) are real time. The main difference is that the quotes in the webIRESS system refresh automatically, whereas in the htmlIRESS version, the quotes have to be refreshed.
STP is a system for automatic processing of client orders into the Stock Exchange Automated Trading System (SEATS) and CLICK. When you have confirmed your order through the Internet trading platform, it will be automatically submitted to the market (SEATS/CLICK) provided it passes validation criteria. These criteria are based on the ASX Business and Dealing Rules plus Morrison's own business rules. If any of one of these criteria does not pass, the order will not be entered into the market and will be rejected back to you.
webIRESS is available free of charge if 10 or more trades are done in a month. If less than 10 trades are done in a month, then you will be charged $100 (plus GST) as monthly subscription for WebIRESS. htmlIRESS is available free of charge if a minimum balance of $5000 is maintained in the trading account.
Yes. You can currently link your Macquarie Bank CMT account or Adelaide Bank CMT account and trade over the Internet. Please contact us on 1300 886 010 for further information.
(a) Your Caps Lock key might be ON - please turn it off and try again
(b) You have already logged in before (possibly on some other computer). If this is the case, you will get a message saying "Login Licence limit exceeded".
Your orders might not have met the necessary validation criteria. Please make sure that you have sufficient funds in your trading account (if you have a buy position) and/or you have the holdings of the shares/options that you want to sell. If the problem still persists, please call us on 1300 886 010.
Margin lending means borrowing to invest, and is also known as gearing. It allows you to borrow against your existing assets to invest in the sharemarket or managed funds. By combining your own funds with a margin loan, you are able to invest more money, more diversely than you otherwise would have been able to. As there is a bigger investment working for you, there is the potential to increase your investment returns.
Much like mortgaging property under a property loan, your investment portfolio is held as security for the margin loan. The amount you are permitted to borrow from time to time is a function of the lending ratio of the individual investments in your portfolio applied to the market value of those investments.
Increase the total amount of money invested, with the potential to increase the investment returns, including dividend income
The larger pool of investable funds available allows you to spread capital across a diversified investment portfolio, which may in turn reduce the volatility
A margin loan can be used to unlock some of the value of your existing investment portfolio without having to sell your investments or crystallising capital gains
Borrowing against your investments through a margin loan can be tax efficient when used as part of an overall financial plan, as loan interest is generally tax deductible when used for investment purposes (depending on your circumstances)
While borrowing to invest or gearing increases the potential return on investments, it is important to recognise that margin lending can also multiply the effect of falls in sharemarket values
Ask your Financial Consultant to determine whether a geared portfolio is suitable for your particular investment objectives and financial position
We recommend that you ensure that you have adequate financial resources to meet your interest payments as well as absorb potential falls in the value of your investments (which may result in a margin call being made)
The amount you can borrow will be determined by your loan limit and the approved securities (shares or managed funds) you lodge as security on your margin loan. There are no minimum loan requirements.
Yes, but only once they have read and understood the terms and conditions in the margin lending brochure. They will simply need to complete the Application Booklet as guarantor for your margin loan.
All securities will be held on your behalf by your Margin Lender, and you will receive all benefits attached to your investments. However, you will need to instruct your Margin Lender upon establishment of your margin loan how you wish to receive your dividends, whether it be cash or reinvested in shares. Where a company initiates a corporate action you will be notified and asked to send written instructions detailing your preference for the particular transaction.
The loan to value ratio (LVR) is the percentage of the security's market value we will lend to you. Eg: If you hold BHP shares worth $5,000 we would lend you 75% of $5,000. That is, you would have $3,750 to invest in other securities or acceptable business purposes.
If you were to combine the $5,000 of BHP shares with a new portfolio comprising other stocks also with the 75%LVR, then we would be able to lend up to $15,000 giving you a combined portfolio of $20,000
A margin call is when the amount of funds you have borrowed is greater than the loan limit inclusive of the margin buffer. That is, the current LVR is greater than the maximum LVR.
Upon establishment of your margin loan, you will elect the method and frequency at which you receive your statements. Statements can be sent monthly, quarterly or semi-annually via email or post.
You will need to establish a trading account with Morrison Securities specifically for settling trades through your margin loan. The details of this account should reflect the exact details of your margin loan. If you wish to place trades you simply notify Morrison Securities who will place the trade in the market. Upon execution of the trade an email and/or fax will be sent to us to confirm the trade details for settlement on T+3.
If you wish to purchase managed funds you will need to provide an instruction letter to your Margin Lender along with the relevant managed fund application form completed with investment details only. Please leave the applicant details and signature section blank. Upon receipt of your instruction we will complete the application on your behalf under our nominee company and lodge the investment with the relevant fund manager.
If you wish to sell an existing managed fund held as security on your margin loan simply complete the redemption request form located on our homepage under Resources or write your own letter and fax it to us on (02) 9210 1888.
Interest is calculated on your loan amount daily and charged monthly. Alternatively, you can fix and prepay interest 12 months in advance. Interest rates are updated periodically and you can view these rates on our homepage under Resources.
You can use your shares as security to write covered calls. This may allow you to earn additional income which can be used to reduce your total borrowings. By writing covered calls you may limit the amount of security value available to borrow if the call option becomes in the money. Where a covered call option is in the money, your security value will be capped at the strike price of the call multiplied by the number of contracts.
