Frequently Asked Questions about US Option

1. What is the minimum trading? 

Options is a kind of contract, and its trading unit is 1 contract.

Generally, the size of 1 contract is equivalent to 100 shares (Corporate Actions may affect the size of 1 contract and may not be equivalent to 100 shares).

2. Expiring option contracts 

On the last trading day of an option, if the option is In-the-Money or < 5% Out-of-the-Money, the option contract will be forcibly liquidated 1 hours before the market closes if:

Long Put: All

Short Call: Non-covered positions (No underlying stock positions for delivery upon assignment if require).

Long Call / Short Put: If there are insufficient funds in the account for option to be exercised / assigned.

3. What is the Trading Time of US Stock Options? 

The trading time of US Stock Options is same as US Stock, the trading hours (SGT) is:

• Daylight saving: 21:30-04:00
• Non-day-light saving: 22:30-05:00

*Warm Reminder: US Stock Options do not support Pre-market and After-Hours Trading.

 

4. Risk Reminder 

- Limited time: Options have an expiration date, which means that traders must accurately predict not only the direction of the underlying asset's price movement, but also the timing of that movement.

- Price volatility: Options prices are affected by changes in the price of the underlying asset, as well as changes in volatility. Sudden and unexpected price movements can cause options prices to fluctuate rapidly, leading to potentially large gains or losses.

- Liquidity risk: Some options markets may be less liquid than others, which can make it difficult to buy or sell options at a fair price.

- Leverage risk: Options are a leveraged financial product, which means that traders can control a large amount of underlying assets with a relatively small amount of capital. While leverage can magnify potential profits, it can also amplify potential losses.

Overall, trading options can be a high-risk, high-reward activity. Traders should carefully consider their risk tolerance and use risk management strategies to minimize potential losses.