Stock Options

Promotion materials are in Chinese only, please contact (852) 2277 6611 for any enquiry.

最新推廣(所有交易不設平台費)

備兌期權 (Covered Call/Put)開倉免佣

「期權寶」之條款及細則

條款及細則:

  1. 沽出認沽期權時,股票期權戶口需有足夠的按金,即整筆接貨金額,直至合約到期或平倉。
  2. 免佣優惠只適用於網上落盤及電子賬單客戶。
  3. 於交易系統下單時需指明是期權寶交易,成交後將不能更改。
  4. 備兌認沽期權開倉免佣,佣金先收後回。
  5. 沽出認沽期權的佣金將於下月的首5日內退回股票期權戶口。
  6. 即使股票價格低於行使價,該期權仍有機會被行使。

 

按此參考交易「期權寶」介面

備兌認購期權條款及細則

  1. 沽出認購期權當日, 該股票必需在股票期權戶口。
  2. 沽出之認購期權有機會被行使, 並沽出備兌用之股票。
  3. 備兌認購期權開倉免佣。
  4. 沽出認購期權的佣金將於下月的首5天內退回股票期權戶口。
  5. 免佣優惠只適用於網上落盤及電子帳單客戶。
  6. 即使股票價格高於行使價,該期權仍有機會被行使。

本公司保留更改有關條款及細則之權利,恕不另行通知。如有任何爭議,本公司擁有最終和不可推翻的決定權。
投資涉及風險,請參閱本公司www.poems.com.hk網頁內的〔風險披露聲明〕。
若 閣下欲停止接收我們的資訊,請電郵至cs@phillip.com.hk或致電 (852) 2277 6555 以聯絡客戶服務部。

股票期權戶口資產淨值達$1,000,000,佣金比率0.18%,最低佣金$5

股票期權戶口資產淨值達$1,000,000,佣金比率0.18%,最低佣金$5

VIP資產淨值優惠於4月1日正式上線

條款及細則:

  1. 此優惠由2021年4月1日起生效。
  2. 此優惠按上一個工作天日結後的資產淨值結算,只要上一個工作天日結後戶口內的資產淨值(現金及期權淨值總和)達到一百萬港元以上,即日交易就享有優惠。
  3. 此優惠只適用於網上落盤及電子帳單客戶。

本公司保留更改有關條款及細則之權利,恕不另行通知。如有任何爭議,本公司擁有最終和不可推翻的決定權。
投資涉及風險,請參閱本公司www.poems.com.hk網頁內的〔風險披露聲明〕。
若 閣下欲停止接收我們的資訊,請電郵至cs@phillip.com.hk或致電 (852) 2277 6555 以聯絡客戶服務部。

即日期權交易(Day Trade)佣金比率0.18%,最低佣金$5

股票期權即日鮮佣金比率0.18%,最低佣金$5

即日期權即日鮮於4月1日正式上線

條款及細則

  1. 優惠期由2021年4月1日起生效。
  2. 只要同一合約,以當天的總買入張數和總賣出張數釐定: 張數較小的一邊不少於另一邊的50%,即屬即日鮮,兩邊用新收費計算。
  3. 此優惠只適用於網上落盤及電子帳單客戶。
  4. 佣金優惠只適用於股票期權交易,不包括行使/被行使之佣金。

本公司保留更改有關條款及細則之權利,恕不另行通知。如有任何爭議,本公司擁有最終和不可推翻的決定權。
投資涉及風險,請參閱本公司www.poems.com.hk網頁內的〔風險披露聲明〕。
若 閣下欲停止接收我們的資訊,請電郵至cs@phillip.com.hk或致電 (852) 2277 6555 以聯絡客戶服務部。

每宗長倉交易合約10張或以下$5/張

每宗長倉交易合約10張或以下,可享有$5/張

長倉優惠於4月1日正式上線

條款及細則

條款及細則:

  1. 每宗交易期權合約10張或以下,HKD 5/張; 只適用於長倉之開倉及相關之平倉。
  2. 以上新收費只適用於網上落盤並使用電子賬單之股票期權客戶。

本公司保留更改有關條款及細則之權利,恕不另行通知。如有任何爭議,本公司擁有最終和不可推翻的決定權。
投資涉及風險,請參閱本公司www.poems.com.hk網頁內的〔風險披露聲明〕。
若 閣下欲停止接收我們的資訊,請電郵至cs@phillip.com.hk或致電 (852) 2277 6555 以聯絡客戶服務部。

對沖戶口(Hedge Account)免費申請,減低按金要求

對沖戶口(Hedge Account) 免費申請,減低按金要求

特點

按金會利用對沖方式計算,客戶的按金要求會大幅減低,有效運用資金作不同的買賣策略。

開戶要求

期權交易平均佣金達每月$1,000或期權戶口現金達$100,000

開戶程序

填妥「股票期權獨立客戶戶口申請表格」,把正本交回客戶經紀,由經紀簽名後代為交回金鐘總行股票期權部便可。

其他期權交易佣金比率0.18%,最低佣金$50

此優惠於4月1日正式上線

條款及細則

條款及細則:

  1. 優惠期由2021年4月1日起生效。
  2. 此優惠只適用於網上落盤及電子帳單客戶。
  3. 佣金優惠只適用於股票期權交易,不包括行使/被行使之佣金。

本公司保留更改有關條款及細則之權利,恕不另行通知。如有任何爭議,本公司擁有最終和不可推翻的決定權。
投資涉及風險,請參閱本公司www.poems.com.hk網頁內的〔風險披露聲明〕。
若 閣下欲停止接收我們的資訊,請電郵至cs@phillip.com.hk或致電 (852) 2277 6555 以聯絡客戶服務部。

Concept of option

Options are a right with deadline. The buyer pays an option premium for the rights granted by the contract. The seller earns the premium for the obligation to honour the contracts.

Stock options’buyer and seller:


Investors can choose LONG (buy) or SHORT (sell) stock options

 

Buyer(holder)-- have rights but no obligation to exercise on or before the expiration date.
Seller(writer)---are obliged to honour the contracts if the holders choose to exercise.

Types of Options:

There are two types of stock options:

(Call Option)

short call      Short Call

Example: Stock A (October) at $90 strike price
Holder has rights to buy the stock at $90 (strike price) on or before October Expect rising of stock price
Writer is obliged to sell the stock at $90 if the holder exercises the contract Expect not rising of stock price

Put Option

Long Put      Short Put

Example: Stock B (October) at $20 strike price
Holder has rights to sell the stock at $20 (strike price) on or before October Expect falling of stock price
Writer is obliged to buy the stock at $20 if the holder exercises the contract Expect not falling of stock price

Stock option is a contract entered by and shared between two parties, a buyer and a seller. Everyone can long (buy) or short (sell) the contract. The buyer has the right, but not the obligation, to buy or sell the underlying asset at predetermined price on or by a predetermined expiry date. On the other hand, the seller has the obligation to buy or sell the underlying asset at predetermined price on or by a predetermined expiry date if the buyer exercises the contract. When you long an option, the purchase price is called the premium. If you short, you receive the premium.

Exercise / Assignment

The owner of an option contract has the right to exercise it, trading the underlying asset at the strike price, called “Exercise”. An option of a seller is exercised by owner, called “Assignment”.

Open a position / Close a position

An open position means that the trader holds a certain quantity of a given financial instrument. In order to close a position, the position must be bought or sold back to the market. So to close a long position, traders would sell the asset back to the market. And to close a short position, the trader would buy the asset. If you bought an option, you must use a "sell to close" order, which is akin to owning a stock that you then sell back into the market, in order to close out the position.

Characteristics of Stock Options

Flexible investment strategy

Stock options can assist investors to make profits in bullish, bearish or stagnant markets.

Hedging with options

Investors can restrict the downside while enjoying the full upside by hedging the underlying assets with options.

Leverage the return

Stock option is derivative, which leverages the investment return.

Low Transaction Fee

The transaction fee for stock option is cheaper than that for the same amount of stocks. Besides, stamp duty is exempted for stock option.

Stock Option

Phillip is one of the earliest option brokers in Hong Kong, engaging in stock option business over ten years, even the first broker to develop the electronic trading platform in Hong Kong. Nowadays, Phillip is still the market marker for the stock option of Tracker Fund (2800), responsible to offer a certain amount of quotes in order to maintain the liquidity in the market. Through the experience of the development in stock option business, our experienced option dealers can assist clients to trade and answer enquires from clients. Moreover, Phillip developed an electronic trading platform for stock option – OATS, which provides a comprehensive service of online trading and real time quote. Besides, Phillip offers a lot of stock option courses, taught by our senior dealers, for clients to learn about our trading platform and option analysis so as to grab the investment opportunities.

Options Advanced Trading System (OATS) is our self-developed electronic trading platform. OATS provide a comprehensive coverage of online trading and real-time option price quotes. Our experienced dealer offer monthly options courses regarding  OATS ‘s trading system and other options knowledges for our clients to capture market opportunities.

Options Advanced Trading System OATS

OATS OATS.NET electronic stock options trading platform is a platform our self-developed platform that offers comprehensive online business transactions, real-time quotes, options price quotations and order price alternation functions. Action now and apply immediately to experience our professional online stock option trading services.
  • Instant Price Quote Service
  • Contracts Transactions Record
  • Profit & Loss 
  • Options position view
  • Instant Dow Jones News
  • Options Delta and Implied Volatility information
POEMS Phillip offer online options trading services to our clients. Clients can trade options online via our POEMS system without additional installation of any software program once clients applied the online trading platform.
  • Conduct options price quote directly to market makers 
  • Direct access to the HKEx’s trading system
  • Free options price quote – 5 price depth and quantities
Mobile We offer Mobile Apps for options trading exclusively, no matter where you are, where you in. You can also smartphone for trading anytime, anywhere.
  • Flexible and comfortable, no matter where you are, where you in, you can also use the smartphone to trade anytime, anywhere.
  • Easy and user friendly, trades are easier than ever before. Now, even if you have been outside, you can use mobile phones to obtain information to trade.
  • Safe and reliable, - using sophisticated wireless encryption technology, POEMS Mobile to ensure your transactions in a safe and secure environment.
Professional Phillip Securities (HK) Ltd. is one of the earliest stock options brokers, we engaged in options business for more than a decade. Our experienced dealers/representatives can understand the clients’ needs and provide related customer services.
Professional Lectures and Workshops – Option group teaching
Phillip offers several stock option lectures and workshops to our investors in which investors can learn about the basic knowledge of option and the related investment strategies, such as combination of options and stock and practical tips for trading options.
option strategy Weekly analysis – option commentaries
Weekly option focus and analysis for deploying the investment strategies
excelrt Excel RealTime automatic trading system, 30-Day free trial
Excel RealTime quotation and trading system, accompanied with Microsoft ® Excel, provides a lot of functions to investors, such as risk data calculation, real time data quotation, automatic trading, etc. For details, please visit http://www.poems.com.hk/zh-hk/phillip-apps/excel-realtime/ http://www.poems.com.hk/zh-hk/phillip-apps/excel-realtime/
查詢請電 股票期權部 22776622 或 電郵至 option@phillip.com.hk 聯絡我們


 

本公司保留更改有關條款及細則之權利,恕不另行通知。如有任何爭議, 本公司擁有最終和不可推翻的決定權。

投資涉及風險,請參閱本公司www.poems.com.hk網頁內的〔風險披露聲明〕。

Features

  • Margin requirement was lower and calculated based on hedging method. Better fund utilization for different trading strategies can be achieved.
  • Actual market risk can be reflected from the hedging profile
  • Margin requirements real time update on OATS
  • Free

3 Popular hedging strategies

『Hedge account』 is for sophisticated investors for setting different trading portfolios’ combination. 3 popular hedging strategies includes :
  1. Bull/bear,call/put spread
  2. Straddle/strangle
  3. Butterfly/condor

Example

Bull put spread

  • Short #1, $90.00, September put option @$2 
  • Long #1 $85.00, September put option @$0.75
  • Premium received : $2 - $ 0.75 = $1.25
  • Potential total loss : $90 - $85 -$1.25 = $3.75
  • Normal margin = $5,400
  • Hedge account margin = $2,470

Account opening requirements

Monthly options commission is $1,000 Or Net equity > $100,000(Net equity requirement is as low as $50,000 in the promotion period*)

*Promotion is valid until 31/12/2019

Account Opening

Fill in the [Options Hedge A/C Form] and return with signed original copy to Stock Option Department.

Click here to download

Author

股票期權部 (Options)
輝立証券

Phone:
852 2277 6622

快手 1024.hk 期權策略

Wednesday, June 02, 2021 Views15711

基本分析

快手(1024.hk)一直曾經在新股市場風魔一時的股票,上市之後曾經出現過300%以上的升幅,曾經被人譽為新股之最。好景不常,股票波幅較大,股價在二月的高位$417.8就開始進入下滑階段,截至5月尾,股價已經跌穿了$200到$190.2出現了超過50%的跌幅,而很大的原因是背後公司的虧損以及股值過高,最近最新2021年第一季度的報告也同樣證實了這件事。

 

在最新的季度報告中首先營收是有增長的。第一季度的收入是170億以上,同比增長為35%以上。銷售成本有大概20%的增長,最終的毛利為大概70億,同比增長是64%左右。在銷售成本(Cost of goods sold)的這個方面,公司可以有效地控制,且減低佔比。

 

但儘管,營收和毛利雙雙都有增長,但都不能抵消虧損幅度的擴張,而罪魁禍首就一定是其他的銷售費用。銷售及營銷開支為116億,同比增長是大概44%,增長速度快過營收,營收佔比例也從之前的65%到了現在的68.5%。另外銷售及營銷開支雙雙都有100%以上的增長,代表著大概雙倍以上的佔比增長。當我們把股份薪酬以及優先贖回股份的價值變動加回到的計算,經調整虧損淨額為49億,同比增長為13.2%。在各開支的拖累底下,公司的虧損看得出有明顯的擴大。

 

有憂但同時都有喜,雖然公司在第一季度的開支真的不可理喻,但用戶方面有著不錯的反應。無論是每日和每月用戶量還是到平均每用戶使用時間,還是每日平均線上服務收入(科金)都是由明顯的增長的。證明了,產品以及平台是受到大眾的支持,而且還奪取了多方面的直播權,包括CBA和東奧,這些都會是將來可以期待的地方。

技術分析

有喜有憂,但公司在虧損的情況這個是事實,在虧損加速的情況底下,我們估計不到到底什麼時候可以由虧轉盈。在報告推出的第一天,股價就出現了11%以上的倒退。其實如果我們看股價,股價從二月的高位就一直處於下滑的階段可以看到一浪比一浪低,而我們更加不能忘記的是很多人持手的是從新股抽回來到現在的,所以當股價一直在這種的趨勢裡面,就會很多人選擇鎖利潤離場。股價一直被押下去,而看到的是在每一次的下滑通道中托市的力量有限,所以形成的一浪比一浪低。

現價:212.2

目標價:190以下

 

 

期權策略

比較進取的投資者可以選擇認沽期權的短倉,我們可以看到的是每一浪的跌幅大概會在半個月到一個月之內完成,所以我們可以選擇在短期內開倉,或者看多一兩天當跌勢確認後再入市也不遲,因為如果太早入市,而股價站穩多一兩天,這樣投資者有可能會損失額外的時間值

例子合約

6月190行使價的認估期權,期權金:4.16(每股),期權金:2080(每張)

目標:短期內的急跌,最理想的情況下可以在短時間內跌穿$190,這樣我們能賺取更多的時間值(引申波幅)。

Risk disclosure statement and disclaimers of Trading Futures and Options
The risk of loss in trading futures contracts or options is substantial.  In some circumstances, you may sustain losses in excess of your initial margin funds.  Placing contingent orders, such as “stop-loss” or: stop-limit” orders, will not necessarily avoid loss.  Market conditions may make it impossible to execute such orders.  There is a possibility that any stop-loss order may be cancelled by a futures exchange due to various reasons including where orders are ‘out of price limits’ during a fluctuating market.  You should closely monitor your orders, as we may be unable to contact you in the event of cancellation.  You may be called upon at short notice to deposit additional margin funds.  If the required funds are not provided within the prescribed time, your position may be liquidated.  You will remain liable for any resulting deficit in your account.  You should therefore study and understand futures contracts and options before you trade and carefully consider whether such trading is suitable in the light of your own financial position and investment objectives.  If you trade options you should inform yourself of exercise and expiration procedures and your rights and obligations upon exercise or expiry. You should study carefully the Disclosure Statements of Local Futures on our website

Account Opening

To open a stock options account, clients should:

  1. Open a margin account or cash account (Custodian) in order to open a stock options account.
    For more details please click here
  2. Enable the POEMS (online trading platform) in order to trade stock options online

Margin Requirement

Clients can receive a premium when they short call or put. When doing so, they must deposit enough money to fulfill the margin requirement.

There are different margin requirements for option contracts with different strike price and expiry date. The margin requirement can be found out from the HKEx web site Client Margin Estimate Reference Table. In case of conflict between the HKEx web site and the option statement, option statements shall prevail.

When there is an intra-day margin call, it is necessary for clients to deposit sufficient money into their options account within the time specified.

For Short positions, kindly remind about the contracts' notional value (Stock value of short positions if contracts is being assigned). Additional margin requirements may require for large short position, clients may need to prepare additional cash as margin requirements for risk control. For details, please contact us.

Reporting Levels and Positions Limits

Where Clients hold open position in Stock Options contracts exceeding a certain level, our Company shall report such holding to the Exchange. Additionally, Clients may not hold positions that exceed the position limits.

For specifics regarding reporting levels and position limits, please refer to the link below:

https://www.hkex.com.hk/Services/Trading/Derivatives/Overview/Trading-Mechanism/Large-Open-Positions-and-Position-Limits?sc_lang=zh-HK#excess

Other fees

Commission

premium x number of shares x 0.25% (min. $50)

HKEx trading tariff

Tier 1: $3

Tier 2: $1

Tier 3: $0.5

Example:

Long 5 lots (2000 shares), HSBC, strike $90, November call, premium $0.7

Premium = 0.7 x 2,000 = $1400

Commission = $100

Trading tariff =5 x $3=$15

Total cost =$1400+$100+$15=$1515

Settlement

The settlement day for stock options is T+1: clients must deposit sufficient margin on day T. Otherwise, the following action could be done to clients without notification.

  1. Stop allowing clients to open positions.
  2. Closing of the clients’ position.
  3. Buying or selling the underlying stock for option assignment.

Clients have to transfer their stocks to their option account for covered call before 3:30 p.m. on day T.

Remarks : Margin requirements varies according to the shares price changes, final margin refer to the day-end stock option statement

Exercise and Assign

If clients would like to exercise their stock options, then please contact Stock Options Department at (852) 2277 6622 before 4:30 pm.

If contracts are exercised / assigned from selling stocks which clients do not own, clients are required to buyback the stock by T+1.

Myth 1: Short Options have infinite risks ?

Answer:  In general, short options are associated with huge or infinite risks. This concept is theoretically correct as the prices of the options’ underlying shares may fall or rise to infinite zero. However, this may not be realistic as there were a hypothesis---You do not make any cut loss action.

Disregarding investors can choose stock options of some blue chips or state-owned enterprises such as PetroChina or HSBC etc. Even if the stock price fell to zero, the stock you are holding is still worthless. But will you wait until the stock dropped to zero before the loss cutting it?

Because of the options’ leverage effect, most traders will abuse the leverage effects and expose themselves for huge risks. In fact, if traded options with proper manner and proper risk management, strictly conduct loss cutting procedures, options is not as general as investors imagined danger.

Myth 2: Short options being assigned need to force buy-in or sell the underlying shares. But I do not have sufficient fund associated.

Answer: Most retail investors may not be able to have 100% of funds at any time ready to buy the underlying shares (Short Put assigned for force buy-in shares at the exercise price),but investorscan sell the shares on the day being short put assigned, and the loss is just the gap in between the selling price and exercise price.

Example:Suppose HSBC price at $119, Investors A short Put current month $120 x 10 lots being short put assigned. Investors A can sell out HSBC at market price $119 after the short put assigned brought of HSBC at $120 x 10 Lots,

Actual losses: $ 120- $ 119 = $ 1 X 10 X 400 = $ 4,000.
A just need to prepare $ 4,000, instead of buying 10 hands HSBC's $ 480,000.

Risk associated is the shares prices drop rapidly after the short put assigned.Investors have to set-up cut-loss prices and apply risk control measurements.

Myth 3: Short options can be assigned anytime and with high risks ?

Answer: In general situation, short options won’t be assigned before the options expired date. Option buyers choose to exercise such options contracts will only get the profit equal to the intrinsic value of the options. If they sell the options in the market usually can achieve higher profits ( the profit comes from the options’ time value). So only a small percentage of the option contracts are assigned in advance. One reminder is : Short call options may be assigned in advance because of the dividends factor. Long options owners may exercise their option contract in advance for dividends collection. Investors have to pay attention to the relationship between the underlying shares’ ex-day and the options.

Myth 4 : Short options need to wait until the contract expiry for premium collection ?

Answer: Options premium can be received once the options were shorted. However, short options need margin deposit, if you have sufficient margin deposit, you can withdraw the option premium anytime. 

Myth 5: Short options need to wait until option expiry date for profit realization?

Answer: Most investors misunderstand that options’ profit can only be realized until holding the options till its expiry. However,investors can close position at any time before the option expiry..In general situation, the shorted options’ prices are closed to zero, that means most options premium were earned until options expired. Investors can wait until option contracts expiry Or can close position for profit realization at once.

Option market maker system

Stock Option market is using the market maker system and market makers have the following responsibilities to maintain market liquidity include:

  • Maintain certain amount of price quote : Bid/Ask
  • Provide price quote after receiving price quotation request

Trading Highlights

  • Stock Option is US style option, which can exercise before expiry date
  • Underlying share settlement (Non-Cash)
  • Option T+1 trading settlement
  • The expiry date of each month is on the 2nd last trading day of that month

Related Links

Stock Option and Warrant

 

Recently, derivative products have become more popular in Hong Kong. Its trading volume continues to increase and Hong Kong is even the largest derivative market in the world. Today, we will introduce two of those derivative products – stock option and warrant and compare their characteristics and differences between them.

Comparison table:

 

  Stock Option (股票期權) Warrant (認股證)
Issuer HK Stock Exchange Specific Issuer
Clearing Guaranteed by the HK Stock Exchange No
Strategy Long & Short Long only
Strike price Various selections One strike price designated by Issuer
Expiry Date Various selections One expiry date designated by Issuer
Market Maker More than one One market maker for each specific warrant

 

From the table above, it shows that trading stock option is more flexible because stock option has more choices with different expiry dates and strike prices. Stock option is also guaranteed by the HK Stock Exchange.

Example

Refer to an example on 11/12/2018

  Stock Option Warrant
Contract HKX 235.00A9 #28002 [JP-HKEX@EC1901B]
Issuer HKEx JP
Strike price HK$235 HK$234.04
Expiry date 1/30/2019  2019-01-25
Price HK$4.98 HK$0.07
    Conversion unit
($0.067 x 100 = HK$6.7)
Trading unit 100 10000

*Source: 11/12/2018, #388 HKD$227

From the table above, it shows that trading stock option is more flexible because stock option has more choices with different expiry dates and strike prices. Stock option is also guaranteed by the HK Stock Exchange.

Transaction Charges

From the table above, buying a warrant is similar to buying a stock option, but the price of stock option is lower than the price of warrant, so it is better to buy a stock option instead of a warrant.

 

Stock Option (股票期權) Warrant (認股証)
1. $10/lot (For Long Open less than 10 lots) 2. Maximum commission is $30000
0.25% of turnover (min $100)  

 

Reminder: transaction charges are subject to relevant terms. For details, please refer to Schedule of Fees and Charges for Services for Stock Option or contact Stock Option department by 2277 6622.

 

Myth 1: Short Options have infinite risks ?

Answer:  In general, short options are associated with huge or infinite risks. This concept is theoretically correct as the prices of the options’ underlying shares may fall or rise to infinite zero. However, this may not be realistic as there were a hypothesis---You do not make any cut loss action.

Disregarding investors can choose stock options of some blue chips or state-owned enterprises such as PetroChina or HSBC etc. Even if the stock price fell to zero, the stock you are holding is still worthless. But will you wait until the stock dropped to zero before the loss cutting it?

Because of the options’ leverage effect, most traders will abuse the leverage effects and expose themselves for huge risks. In fact, if traded options with proper manner and proper risk management, strictly conduct loss cutting procedures, options is not as general as investors imagined danger.

Myth 2: Short options being assigned need to force buy-in or sell the underlying shares. But I do not have sufficient fund associated.

Answer: Most retail investors may not be able to have 100% of funds at any time ready to buy the underlying shares (Short Put assigned for force buy-in shares at the exercise price),but investorscan sell the shares on the day being short put assigned, and the loss is just the gap in between the selling price and exercise price.

Example:Suppose HSBC price at $119, Investors A short Put current month $120 x 10 lots being short put assigned. Investors A can sell out HSBC at market price $119 after the short put assigned brought of HSBC at $120 x 10 Lots,

Actual losses: $ 120- $ 119 = $ 1 X 10 X 400 = $ 4,000.
A just need to prepare $ 4,000, instead of buying 10 hands HSBC's $ 480,000.

Risk associated is the shares prices drop rapidly after the short put assigned.Investors have to set-up cut-loss prices and apply risk control measurements.

Myth 3: Short options can be assigned anytime and with high risks ?

Answer: In general situation, short options won’t be assigned before the options expired date. Option buyers choose to exercise such options contracts will only get the profit equal to the intrinsic value of the options. If they sell the options in the market usually can achieve higher profits ( the profit comes from the options’ time value). So only a small percentage of the option contracts are assigned in advance. One reminder is : Short call options may be assigned in advance because of the dividends factor. Long options owners may exercise their option contract in advance for dividends collection. Investors have to pay attention to the relationship between the underlying shares’ ex-day and the options.

Myth 4 : Short options need to wait until the contract expiry for premium collection ?

Answer: Options premium can be received once the options were shorted. However, short options need margin deposit, if you have sufficient margin deposit, you can withdraw the option premium anytime. 

Myth 5: Short options need to wait until option expiry date for profit realization?

Answer: Most investors misunderstand that options’ profit can only be realized until holding the options till its expiry. However,investors can close position at any time before the option expiry..In general situation, the shorted options’ prices are closed to zero, that means most options premium were earned until options expired. Investors can wait until option contracts expiry Or can close position for profit realization at once.

Stock Options market is using the market maker system and market makers have the following responsibilities to maintain market liquidity includes:

  • Maintain certain % of price quote : Bid/Ask
  • Provide price quote after received price quotation request
  • Stock Options is US style options, it can exercise before its expire
  • Underlying shares settlements (Non-Cash) 
  • T+1 trading settlements
  • 每一張股票期權合約代表1手正股股數
  • Each month’s expiry date is on the 2nd last trading day of each month
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Email : option@phillip.com.hk

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