Option Strategy refers to a combination of positions in an account with a hedging relationship, typically a combination of options and underlying stocks. Tiger will apply some margin relief to the ption Strategy in consideration of the fact that the option strategy mitigates the relevant risks.
Option Strategy Applicable Scope
Client: The option strategy is only available to clients who meet the corresponding conditions and have opened the option strategy permissions. Please contact customer service for more details.
Symbol: US options and US stocks
Option Strategy Type
Tiger currently offers four option strategies as follows:
1. Covered Call: A combination of 1 lot short position in a call option and 100 shares long position in the same underlying U.S. stock.
2. Covered Put: A combination of 1 lot short position in a put option and 100 shares short position in the same underlying U.S. stock.
Option Strategy Margin
The margin requirements related to option strategy are as follows.
1. If your newly held options or stocks can constitute an option strategy with your existing positions, TIGER will reduce the margin requirements for the positions in your option strategy.
2. If you liquidate part of your position in the option strategy, the option strategy will be invalidated and you will no longer be offered margin relief, which may result in a decrease in the risk value of your account. Please ensure that you have sufficient funds in your account before liquidating your position in the option strategy as a forced liquidation will be triggered if your account risk value falls below 0.
If you need to liquidate part of your positions in the option strategy, we recommend that you liquidate the option positions in the option strategy first in order to avoid an increase in margin caused by the liquidation action; if you liquidate the stock positions in the option strategy first but only partially filled, it will cause the option strategy to lapse and there will be both option positions and stock positions in your account, thus the sum of the margin of both positions will be higher than the margin requirement of the option strategy, which will increase the margin of your account.
Please note that the option strategies cannot currently be applied to some positions whose relevant symbols or contract multipliers have changed due to corporate actions at present. If a position in the option strategy is subject to such corporate action, this may result in the option strategy invalidating and thus increasing the margin requirement. Please ensure that you have sufficient funds in your account before liquidating your position in the option strategy as a forced liquidation will be triggered if your account risk value falls below 0.