Optionable Stocks in Australia 2025: Strategies, Risks & Policy Updates

Australian investors are no strangers to innovation, but 2025 is shaping up as a pivotal year for those looking to expand their toolkit with optionable stocks. With the ASX rolling out new guidelines and global market shifts opening fresh opportunities, understanding how optionable stocks work—and how to use them—could be the edge your portfolio needs.

What Are Optionable Stocks and Why Do They Matter?

Optionable stocks are shares listed on the Australian Securities Exchange (ASX) for which options contracts are available. This means you can buy or sell the right (but not the obligation) to purchase or sell these stocks at a predetermined price before a specific date. In 2025, the ASX has expanded its list of optionable stocks, now covering over 120 major equities including blue-chip giants like BHP, CSL, and CBA, as well as a growing selection of tech and energy companies.

• Flexibility: Options let investors hedge against price swings, generate income through premium selling, or speculate on market movements with limited upfront capital.

• Leverage: With options, you control a larger value of stock with less money compared to buying shares outright.

• Risk Management: Protective puts and covered calls are increasingly popular as volatility returns to markets in 2025.

Example: Suppose you hold shares in Woodside Energy (WDS), which is optionable on the ASX. If you’re concerned about short-term volatility due to global oil price shocks, buying a put option allows you to lock in a minimum sale price, cushioning your downside risk.

2025 Policy Updates and Market Trends

This year, the ASX has implemented reforms aimed at boosting transparency and reducing settlement risk for option contracts. Key updates include:

• Shorter settlement cycles (T+1): Since March 2025, options now settle one business day after the trade, aligning with global best practices and reducing counterparty risk.

• Expanded eligibility: More mid-cap and technology stocks have become optionable, reflecting growing investor demand in sectors like renewables and fintech.

• Increased margin requirements: To mitigate systemic risk, initial margin requirements for writing uncovered (naked) options have increased, especially on high-volatility stocks.

These changes mean investors can trade options more efficiently, but also need to keep a closer eye on margin calls and liquidity. The ASX’s latest data shows a 14% year-on-year increase in options trading volume in Q1 2025, with much of the growth coming from retail investors using options for income strategies.

Strategies for Using Optionable Stocks in Your Portfolio

Options are powerful, but they’re not for the faint-hearted. Here are some ways Australians are using optionable stocks in 2025:

• Covered Calls: If you own shares, selling call options can provide extra income. For example, holding 1,000 shares of CSL and selling a call option with a strike price above the current market price can earn you a premium, even if the stock stays flat.

• Protective Puts: Buying puts on your holdings—especially after a strong run-up—can lock in profits or limit losses, which is handy during the current global economic uncertainty.

• Speculative Plays: Some experienced investors use options to bet on earnings surprises or sector rotations, risking only the premium paid for the option rather than full share exposure.

It’s important to remember that while options can magnify returns, they can also magnify losses, particularly with uncovered positions. The recent increase in ASX margin requirements reflects this risk, and it’s crucial to understand your obligations before trading.

Real-World Example: Using Options on ASX Tech Stocks

In 2025, Afterpay’s parent company Block (SQ2) has become one of the most actively traded optionable stocks on the ASX, as investors look to hedge against swings in the buy-now-pay-later space. A common strategy has been buying straddles—purchasing both a call and a put option at the same strike price—to profit from large moves in either direction following earnings announcements. This approach saw a surge in popularity after Block’s volatile Q1 report, with several investors capturing double-digit percentage gains despite market uncertainty.

Risks and Considerations

• Complexity: Options require an understanding of factors like time decay, volatility, and strike price selection.

• Margin Calls: Writing options without owning the underlying shares can expose you to potentially unlimited risk.

• Liquidity: Not all optionable stocks have deep markets. Thinly traded options can result in wide bid-ask spreads and difficulty exiting positions.

Before diving in, investors should ensure they’re approved for options trading with their broker and understand the mechanics and risks involved.