Option trading FAQ

1. How to trade options?

2. What are the supported order types for options?

3. What's the trading unit for options?

4. What are the trading hours for options?

5. How to file error trade claims for stock options?

6. Why does the margin requirement increase when I long options?

7. Where can I check the margin sheet for stock options?

8. Why is there such a big difference between the market value of my stock options and the market value of my position after yesterday's close?

9. Why is the sum of net assets by the close of the previous trading day and today's P&L not equal to the current total assets?


1. How to trade options?

Trading options is similar to trading stocks. You can place an order after entering the quantity and price.


2. What are the supported order types for options?

HK equity options trading supports Limit Order, Stop Limit Order, Limit if Touched Order, Trailing Stop Limit Order.


3. What's the trading unit for options?

Options are traded in units of contracts.

For example, there is an option contract TCH 190829 140.00C. Its quoted price is 16.7 HKD and each contract corresponds to 100 Tencent shares.

Therefore, the price (premium) of this contract is 16.7 * 100 = 1670 HKD.

Upon exercise, you will receive 100 shares of Tencent.


4. What are the trading hours for options?

Trading hours for the options are 9:30-12:00 and 13:00-16:00 China Standard Time.

Note: Options do not support pre-and post-market trading.


5. How to file error trade claims for stock options?

While trading Hong Kong stock options, if you believe that the final transaction price of your order is significantly different from the actual price, making the situation a possible case for a trade error, you can contact our customer service team as soon as possible, and we will assist you in filing an error trade claim to the Hong Kong Stock Exchange for a total charge of 5,000 HKD in related fees.

According to the relevant regulations of the Hong Kong Stock Exchange, please note the following items for error trade claims: 

● The claim should be filed within 30 minutes of the trade execution

● Both parties of the transaction must agree that the transaction is an error in order for the HKEX to cancel the trade

● If the parties disagree or cannot be reached, the decision will be made by a special Error Trade Review Panel, comprised of members of HKEX's staff 

● The exchange shall have absolute discretion in determining the Reference Price used and the panel's decisions are final

● Fees are not refundable, regardless of the final decision on the claim


6. Why does the margin requirement increase when I long options?

Generally speaking, longing an option does not require additional margin. However, in terms of account risk, longing an option is equivalent to converting part of your available funds into a non-collateralized option contract of equal value. As a result, the net assets in your account remain unchanged, but the funds available are reduced.

It can be approximated as follows: available funds = net assets - initial margin. The increased margin actually represents a decrease in available funds, similar in principle to when you buy non-collateralizable stock (margin rate of 100%).


7. Where can I check the margin sheet for stock options?

Customers who sell options (short) are required to maintain the margin level required by HKEx on a daily basis.

Specific requirements can be found at https://www.hkex.com.hk/eng/sorc/margin_data/margin_data_search.aspx

Note: FUTU reserves the right to increase the margin requirements according to its own risk control needs.


8. Why is there such a big difference between the market value of my stock options and the market value of my position after yesterday's close?

Before trading day (08:55 a.m.), we will update your option value with yesterday's settlement price published by HKEx.

After the market opens, if there is any transaction, the latest traded price will be used to calculate the market value of the option; if there is no transaction, the market value of the option will remain at the same price until the next trading day when it will be updated again to the new settlement price of HKEx.

Whether you refer to the most recent traded price or yesterday's settlement price, the market price used to calculate the market value of the option is a reference value that reflects the value of the option and does not change the size of your option position, nor does it affect your assets or trading.

It can reflect the true value of options that have not been traded for a long period of time, allowing investors to avoid making wrong investment decisions due to large deviations from the market price and true value.


9. Why is the sum of net assets by the close of the previous trading day and today's P&L not equal to the current total assets?

If you hold options on Hong Kong shares, the problem could be caused by the inconsistency of the reference benchmark and does not affect your actual assets.

(1) In calculating today's P/L for options, yesterday's market value in the formula uses the published option settlement price.

(2) And it was calculated using the closing price from yesterday's close to this morning's open.