Futures FAQs

Any questions you have about Futures and Options Trading will most likely be answered here.

You will be charged a flat fee on a per lot per side basis. The fees are based on the volume of trades you execute, the higher the volume the lower the fees. There is no charge to place orders or call levels you will only be charged when an order is executed. Brokerage rates are dependant on the markets on which you are dealing as well as the size of your orders. For a complete list of charges please refer to our Disclosure Statement found under News on the website. Please note that in addition to brokerage you are also liable for Stamp Duty on any UK (currently 0.5% of the trade value) and Irish purchases (currently 1.0% of the trade value).

There are three different terms for describing where an option is trading in relation to the price of the underlying security. These terms are ‘at the money’, ‘in the money’ and ‘out of the money’. If XYZ stock is trading at a price of 100, the November 100 call is considered to be trading ‘at the money’. If XYZ stock is trading at a price greater than 100, say 102, the call option is considered to be ‘in the money’. An if XYZ is trading at a price less than 100, say 98, the call option is considered to be trading ‘out of the money’. Conversely, if it was an XYZ November 100 put option and if the price of XYZ stock was 102, the put option would be considered to be ‘out of the money’. And if XYZ stock was trading at a price of 98, the put option would be considered to be trading ‘in the money’. If XYZ stock was again trading at 100, the put option would be ‘at the money’.

An obligation to exchange a good or instrument at a set price on a future date. The primary difference between a Future and a Forward is that Futures are typically traded over an exchange (Exchange-Traded Contacts - ETC), versus forwards, which are considered Over The Counter (OTC) contracts. An OTC is any contract NOT traded on an exchange.

You should arrange a time to meet with one of OMFinancial’s Client Advisors who will explain trading to you in detail. It is then simply a matter of - Completing OMFinancial’s Client Application form and supplying the necessary documentation; - Reading and agreeing OMFinancial’s Terms and Conditions; - Lodging sufficient funds to cover the initial margin on the position(s) you wish to open in OMFinancial’s bank account.

View the list of OMFinancial's bank account details.

Interest is paid on all excess funds in your account, this being the amount available after initial margin and variation margins have been excluded. Interest is also earned, or charged, on open currency positions depending on whether a currency has been bought or sold. These latter interest payments are credited to a bought currency (similar to a credit balance in an interest bearing cheque account) and debited to a sold currency (similar to a debit balance in a cheque account). More information is available on this topic at your request.

Your funds deposited with OMFinancial will be paid directly into our Client Segregated Funds Account in accordance with The Futures Industry (Client Funds) Regulations 1990.

You may maintain your account in any of the major currencies covered in Margin Foreign Exchange trading. These include: New Zealand dollars; Australian dollars; US dollars; British pounds; Japanese Yen and Eurodollars. For Futures trading, your account will be a multi currency account with transactions processed in the relevant currency the futures contract is traded in.

OMFinancial has access to most financial markets around the globe. For full details of the available markets please contact OMFinancial directly.

OMFinancial’s trading desk is open 24 hours daily from 7:30am Monday morning through until markets close on Saturday. Naturally if you place an order in a market not yet opened you will not receive notification until the trade is completed. A true 24-hour market, Foreign Exchange trading begins each day in New Zealand, and moves around the globe as the business day begins in each financial centre, first to Tokyo, then London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.

You will be sent an email at the end of each day’s trading confirming your fills along with any orders that you have working. A daily statement is also sent electronically from our Operations Department, which provides all transaction details, brokerage paid, including date, price, notional amount bought and sold. Account statements are sent at the beginning of each month, and list all transactions for the previous month by currency and value date, a summary of all current open positions, and account balances as calculated at the close of business on the last business day of the month. It is obviously important that you review your statements to ensure that it correctly reflects your position. If you have any doubts or questions please contact your Advisor immediately.

In order to gain a practical understanding of foreign exchange and derivatives markets, there is no better way than to open an account and start trading. OMFinancial's advisors will offer you support and are available to answer any questions.

Traders make decisions using both technical factors and economic fundamentals. Technical traders use charts, trend lines, support and resistance levels, and numerous patterns and mathematical analyses to identify trading opportunities, whereas fundamentalists predict price movements by interpreting a wide variety of economic information, including news, government-issued indicators and reports, and even rumour. The most dramatic price movements however, occur when unexpected events happen. The event can range from the government raising domestic interest rates to the outcome of a political election or even an act of war. Nonetheless, more often it is the expectation of an event that drives the market rather than the event itself.