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Stock Options

Stock options are exchange-traded contractual financial agreements jointly agreed by both buyers and sellers, and settled by the clearing house with designated individual stocks (mainly blue-chip and include state-owned stocks of red chips and H shares available for trading). The buyers hold a long position, while the sellers hold a short position.

Stock options are issued by HKEX with a series of maturities and exercise prices for investors to choose from. They are more flexible than other derivatives. Both the subscription and the put options can be long or short, a total of four Basic strategies.

Options can be classified into two types in general – call options and put options.

1.Call Options

Purchasing Call Options (Long Call):
Expect the underlying index to go up. Buyers are required to pay the option premium, and no margin requirement is
needed. Profit is subject to the potential profit on the index upside, and maximum loss is limited to the premium
paid to the call options.

Selling Call Options (Short Call):
Expect the underlying index to go down with low volatility. Call option sellers receive option premium while they are required to meet the margin requirements set by the exchange. Profit comes from the received call premium, and the risk facing is the potential loss resulting from the index upside. Theoretically the maximum loss is infinity.

2.Put Options

Purchasing Put Options (Long Put):
Expect the underlying index to go down. Buyers are required to pay the option premium, and no margin requirement is needed. Profit is subject to the potential profit on the index downside, and maximum loss is limited to the premium paid to the put options.

Selling Put Options (Short Put):
Expect the underlying index to go up with low volatility. Put option sellers receive option premium while they are required to meet the margin requirements set by the exchange. Potential profit comes from the received put premium, and the risk facing is the potential loss on the index downside. Theoretically the maximum loss is the total amount of the underlying index.

If an investor believes some stocks will have greater resistance at a certain price range, and the stocks are not expected to rise through that range, the investor can open short call; in contrast, if the investor believes that the spot commodity will be supported at a certain price range, yet the stock will not fall through that range, the investor can open a short put in order to earn the premium. Compared with warrants, which only allow for long position, stock options give investors more choices.

Secondly, unlike CBBC, stock options do not have a call price. If an investor is optimistic in regards to certain stocks and has opened a long call option, even if the spot commodity price falls sharply afterwards, it will not be recovered like CBBC. As long as the stock bounces back before maturity, the investor will still have the opportunity to make a profit. Likewise, put options will not be recovered like a CBBC does, and the long position holder can trade freely before the contract expires.

Clients can achieve the goal of diversified investments through the purchase and sale stock options. Glory Sun Securities is committed to providing clients with professional stock options trading services to help clients complete their investment goals, including:

 

Use leveraged trading in a rising or falling market

  • reduce trading costs
  • hedge market risks
  • lock up book profits

Account Opening:

We provide various ways for account opening and our licensed professional customer services managers will follow up the process personally.

booking

Online Appointment

Through an online appointment system, the Customer services manager will call to confirm your appointment to open an account, and arrange the time to provide you with personalized account opening services, and explain in detail the common instructions such as account operations, deposits and withdrawals.

Online Appointment 

mail
Mail/Free Courier Service

After completed all the steps instructed, please dial Customer services hotline at 2379 8888 to arrange the free delivery of the relevant documents to us by courier service, or you can mail the documents by yourself.

Mail / Free Courier Service

Trading Platform

Our online Stock Options trading platform is launching soon to provide you with a simple, fast and convenient trading platform. In the meantime, please send all buy and sell instructions through our trading hotline.

Stock Options Trading Hotline
(852) 2854 3123

Please check the Global Securities Fee List for more information on relevant charges.