How to read the futures and options statements - Bell Potter Securities

how to readthe futures& optionsstatements.

HOW TO READ FUTURES & OPTIONSTRADING STATEMENTSThis information has been prepared tohelp you understand your Futures andOptions Trading Statement (Tax Invoice).It should be read in conjunction withyour trading statements.About your Trading StatementsIf you have provided your email address,trading statements will be emailedwhen trading activity occurs. You willalso receive a copy in the mail to yournominated mailing address. Statementsare mailed using the standard AustraliaPost service, so please allow for deliveryperiods to your address location.We recommend that you subscribe to theemail delivery service as this will enableyou to receive statements overnight onthe day of processing. Please ensure thatyou have provided your email address aspart of the account information requestedin the Account Opening Form if you wishto utilise this service.Please retain copies for tax purposes,as additional statements will incur areproduction fee.ImportantClients must review the full contentsof all statements issued and adviseBell Commodities of any discrepanciesimmediately. It is important that clientsread and understand the contents ofissued documents. Bell Commoditiesrepresentatives are available if yourequire assistance on receipt of your firsttrading statement.We recommend that clients maintain anorder book of all instructions given to BellCommodities and verify that the contentsof the statements are in accordance withthe instructions given. In the event thatyou do not receive a statement via emailor postal delivery, please contact yourBell Commodities Adviser.AddressYour postal address will appear at thetop of the statement. Please advise BellCommodities in writing immediately ofany change of address.1. DateThis is the processing date for thebusiness contained on the statement.Please note that non-Sydney FuturesExchange is processed one day after thetrade date due to the time differencebetween Australia and other majorinternational financial regions.2. AdviserYour adviser’s initials.3. AccountThe number assigned to your account.This should be quoted when placingall orders or making enquiries on youraccount, together with the full accountname. This is also the “agent reference”that must be quoted on all bank depositsof funds into our segregated bankaccounts. Please keep this accountnumber confidential.In accordance with industry regulations,all client fund accounts are “SegregatedAccounts” and this will show on yourstatement.4. Opening Account BalancesThe current cash balance in the accountprior to the entries for the trading day,detailed in each currency held.5. Futures/Options ConfirmationsThese are the trades that have beenbooked to your account for this businessday. Where Option Premium is postedon trade registration (for all non-ASX24 options), the amount on this linerepresents the premium credited on soldoptions, or debited on bought options.Where more than one option has traded,a sub-total will appear with a descriptiveline. There will be a zero on this linewhere a future or ASX 24 option hasbeen traded as the profit or loss on thesecontracts do not post to your accountuntil settlement.Under each position, the FLTD (FuturesLast Trade Date), EDAT (Option ExpiryDate), and UNSP (underlying futuresprice) will be displayed where applicable.Also shown will be the amount ofbrokerage and GST (if applicable) chargedin the currency of the contract that youhave traded.DateLongShortContractDescriptionStrikePriceCurrencyAmountTrade dateBuySellMonthContractC = CallP = Put option on strikeTraded PriceCurrency of the “Amount”The amount chargedThe Recap of Confirm Activity will showthe total amount of Brokerage, GSTcharged on brokerage, and the totaloption premium credited or debited as aresult of these trades.6. Realised Futures Gains/LossesThis section details all settlements(position close-outs), including therealised profit or loss on each settlement.Where the contract is a non-ASX 24option contract, this will be zero (seeabove). For information purposes, onlyfor non-ASX 24 options where premiumis posted in the confirmation section, theprofit/loss will show in the currency of thecontract (“Options P&L For InformationOnly”).7. Itemised Cash ActivityCash Activity includes any deposits,withdrawals, cash adjustments, or anyother non-trade related activity thatresults in a movement of the accountbalance. It shows the date, description,currency and amount of the activity.Unless instructed by the client in writing2

HOW TO READ FUTURES & OPTIONSTRADING STATEMENTS (CONTINUED . . .)on account opening to retain all realisedtrading related activity in the tradedcurrency, the brokerage, GST, premiumand profit/loss related activity will beconverted into Australian Dollars. Theentries shown on the statement willshow the value in the original currencyand the converted Australian Dollaramount, together with the exchangerate used in the conversion. Theamount of information shown on thetrading statement may appear complexto the new client. To assist with this,Bell Commodities provides a monthlyFinancial Summary, which shows theconverted consolidated totals by thedifferent activity type (eg. brokerage,GST, settlements, etc), which is issued toclients at each month end.Many Bell Commodities’ clients find thatthis conversion process greatly assistsin tracking profit/loss and in tax relatedreporting. Should you not wish this tooccur with your account, please instructBell Commodities in writing to maintainyour account as “non-converting”,however please note that realisedlosses that result in a debit balancein any currency must be funded in therespective currency or Bell Commoditieswill instruct a conversion at the prevailingmarket rate without notice to the Client.8. Closing Account BalancesThis is the “cash balance” of youraccount, detailed in each currencyheld, after all related entries have beencredited and debited for the tradingday. This does not include the marginobligation on the account.9. Futures/Option Open PositionsThis section will detail the trade date,long (buy), short (sell), contract month/description, option type (put/call) andstrike, together with the traded price, andunrealised profit or loss “Amount”.On a Futures position, “Amount” willbe the marked-to-market value, whichis calculated as the difference betweenthe traded “Price” and the “Settlement”price.On an ASX 24 Option, “Amount” will bethe marked-to-market value, which iscalculated as the difference betweenthe traded “Price” and the “Settlement”price. The premium value will post ontrade settlement, exercise, assignmentor expiry. This is due to the differentmargining method that the ASX 24 usescompared to other foreign exchanges.Non-ASX 24 options (eg. EUREX DAX,CBOT Wheat) post option premium ontrade registration, and this will appearunder Futures/Options Confirmationsand effect the Closing Balance on youraccount. The “Amount” column willtherefore represent the total liquidationvalue (the amount that would be eithercredited or debited on the selling orbuying of a closing option) based on the“Settlement” price.Under each position, the FLTD (FuturesLast Trade Date), EDAT (Option ExpiryDate), and UNSP (underlying futuresprice) will be displayed.The Unrealised P&L amount is forinformation only, and is the differencebetween the premium originally postedon a non-ASX 24 option, and the currentmarket value (overall trade profit or loss).In the Money will be shown where anoption is in the money. An option, which isprofitable to exercise, ie a long call optionwith a strike price lower (or a long Putoption with strike price higher) than thecurrent market value of the underlyingfutures contract will show as a creditin the money amount. If a short optionposition is in the money it will show as adebit value.Totals will then show in Base Currency(usually Australian Dollars AUD) (SeeTable 1)10. Account Total Adjusted Margin DetailSummary (See Table 2)Where notional conversions are usedto display amounts in base currencythroughout the statement, theapproximate exchange rates will bedisplayed.ADDITIONAL INFORMATIONIn addition to the statement issued whentrading activity occurs, at the end ofeach month Bell Commodities will alsoprovide a Monthly Combined CommodityStatement, which is a full account historyof all trading and financial activity for themonth.Bell Commodities will also issue aFinancial Summary report, which showsthe consolidated movement for the periodon your account. This will show you thetotal amount of brokerage, GST, cash paidor withdrawn, premium, settlements orother financial activity that has occurredon the account.Bell Commodities will also provide aFinancial Summary for each AustralianTax Year period (1 July – 30 June) to assistwith your financial reporting obligations.If you have any questions concerningyour account or require furtherassistance, please contact yournominated Bell Commodities ClientAdviser.How to read the futures and options statements V0801013

Table 1 Futures/Option Open PositionsTotal Cash Market ValueTotal Non-Cash Market ValueTotal Long Option ValueTotal Short Option ValueNet Option ValueNet LiquidityFutures and options related mark-to-market. (Where option premium is not posted on traderegistration – ASX 24 options)Foreign Exchange related transactionsLiquidation value of long (bought) option positions where the premium was posted on theoriginal trade registration (the amount that would be received if the options were sold basedon the current settlement price)Liquidation value of short (sold) option positions where the premium posted was on theoriginal trade registration (the amount that would be paid if the options were bought based onthe current settlement price)Difference between Long Option and Short Option ValueIf all positions were closed at settlement price, this would be the account balance (notincluding brokerage and/or GST due).Table 2 Account Total Adjusted Margin Detail SummaryInitial MarginCash EquityUnrealised Equity on ForwardsPending Cash EntriesMargin Call/ExcessTotal Value in Base CurrencyThe deposit requirement using the defined exchange calculation method, for each currencythat you have positions denominated in. This is calculated by using the exchange publishedrisk parameter files issued on a daily basis. The liquidation value (Net Option Value) ofoptions is included within the initial margin calculation for non-ASX 24 options.The Closing Account Balance plus the Total Cash Market Value.Foreign Exchange trades only (forward dated prompts)Forward dated cash entries (funds pending clearance)The excess or shortage of the overall accountIf all positions were closed at settlement price, this would be the account balance (notincluding brokerage and/or GST due).Notional conversion into Australian Dollars of the above balances based on daily exchangerates.If this amount is a debit, your account will be considered on “Margin Call” and funds arerequired to be remitted to cover this amount immediately.Bell Commodities GPO Box 4718,Melbourne VIC 3001,AustraliaToll Free 1800 672 405Fax 03 9256 8787www.bellpotter.com.auBell Potter Securities LimitedABN 25 006 390 772AFS Licence No. 243480