Welcome to the Help Center.

Options trading is a high-risk trading type. Please read the Risk Disclosure Statement before trading.

1. Options Introduction

An option is a right to buy or sell a certain amount of some commodity at a certain price at a specific time in the future. It is a financial instrument created based on futures, giving the buyer (or holder) the right to buy or sell the underlying asset. The buyer of an option may choose to buy or not buy, sell or not sell within the time specified in the option, and may exercise that right or waive it, while the seller of the option has only the obligations specified in the option contract.

2. Options Categories

     (1) There are two options types by the options rights: Call Options and Put Options.

i. Call Options: The buyer of an option pays a certain amount of premium to the seller of the option and has the right, but not the obligation, to buy a certain amount of the specific commodity specified in the option contract from the seller of the option at a pre-agreed price during the term of the option contract. The option seller is obligated to sell the specific commodity specified in the option contract at the option buyer's request at the price specified in the option contract during the term of the option contract.

ii. Put Options: The buyer of an option pays a certain amount of premium to the seller of the option and has the right, but not the obligation, to sell a certain amount of the specific commodity specified in the option contract to the seller of the option at a pre-agreed price during the term of the option contract. The option seller is obligated to buy the specific commodity specified in the option contract at the option buyer's request at the price specified in the option contract during the term of the option contract.

     (2) There are two options types by the options exercise method: American Options and European Options.

i. American Options: The rights may be exercised at any time during the term of the option contract.

ii. European Options: The rights may be exercised only on the expiration date specified in the option contract. The option buyer cannot exercise the rights until the expiration date, after which the contract will be automatically voided.

     (3) There are stock options, stock index options, interest rate options, commodity options, foreign exchange options, etc., by the underlying specified in the option contract.

3. Important Options Terms

(1) Strike Price: If the market price of stock X is 10 HKD, and the buyer bought a call option of 15 HKD, 15 HKD is the strike price.

(2) Expiration Date: If the option bought expires on 29 September 2020, this is the expiration date.

(3) Open Interest: The number of contracts that have not yet expired and have not been executed.

(4) Contract: The unit of an option is a contract. Usually, each contract is for the right to 100 shares of stock.

4. FAQs

     (1) What is the minimum unit of Hong Kong stock options trading?

The minimum unit of Hong Kong stock options trading is one contract.

[Number of underlying shares in an option contract] = [Underlying contract size (number of shares)] * [Number of board lots].

For example, if the number of board lots is 5, and the number of underlying shares per lot is 200, then the number of underlying shares in one option contract is 1000.

     (2) What are the options-related fees?

Click here to see details.

     (3) What are the options trading hours?

9:30am - 12:00pm, and 1:00pm -4:00pm Singapore time.

     (4) Can options be exercised before the expiration date?

Currently unavailable with Tiger Brokers.

     (5) Can I close my position at any time before the expiration date of the option I bought?

Both long and short options positions may be closed at the market price at any time during the trading hours before the corresponding expiration dates.

     (6) What if an ITM (in the money) option is not exercised or the corresponding position is not closed by the buyer on the option expiration date?

A stock option that expires on the expiration date and reaches 1.5% or more of the strike price at the ITM level will be automatically exercised. However, when the buyer's margin does not meet the exercise conditions, the position will be closed at the market price. If the position cannot be closed at the market price due to illiquidity or other reasons, Tiger Brokers reserves the right to void the option contract, which will result in the full value of the option being voided.

     (7) How can I inquire about the automatic expiration, forced liquidation and system exercise of an option in the trading history?

You may inquire about the relevant records by entering the Tiger Trade APP > the corresponding order > Details.

     (8) Is short selling of Hong Kong stock options available?

Yes.

     (9)What should I do if my account is unable to meet the margin requirement on the Option Contract Expiration Date out of options exercise or assignment?
 
Tiger usually calculate the required fund for exercising in-the-money or near-in-the-money options at any time on the date of expiration before close. In case of insufficient cash in your account, Tiger may liquidate positions in your account to prevent margin deficiency from option exercise. If you anticipate that you will be unable to meet the margin requirement after the option exercise, you should either close positions or deposit additional funds as expiration nears.
 
Tiger reserves the right to:
    1. Forced liquidations prior to expiration,
    2. Allow the options to lapse,
    3. Allow options to be exercised and liquidate other positions.
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