On February 24, the conflict between Russia and Ukraine continued to escalate, and the warming of geopolitical risks had a huge impact on the financial markets. With the mushroom cloud rising over Kiev, the capital of Ukraine, did you hear a loud explosion in your stock account?
The stock market is volatile and the market is generally down, so should we just sit back and wait for losses? As ordinary investors, how should we hedge the risk and fight the "wallet defense"?
Niuniu warm Tip-if you are optimistic and long-held stocks fall and do not know whether to sell, you can consider the allocation of options portfolio to reduce the decline loss without leaving the market.
A little knowledge：Option combination is the abbreviation of real option combination, which is to transform and reorganize options and combine them in terms of issuing time, quantity, price and mode to form new financial instruments. in order to achieve the purpose of avoiding risks, maintaining and increasing value. The common option combinations are butterfly spread, eagle spread, straddle spread and so on.
Here comes the point! In order to help Niu friends hedge their stock positions and keep their "money bags", Niuniujun specially brings you a piece of good news!
Options portfolio margin discount on the new, to your options trading plus buff! Under the premise of the safety of risk control, cattle friends can improve the efficiency of funds, and then one share of the money will be spent twice!
What's new this time?
1Margin reduction of price spread strategy
Spread strategy (Spread) consists of two call options or put options of the same size.
The combined position of the spread strategy (Spread) will be deducted from the margin, depending on the margin requirements of the two options, the exercise price between the options and the difference in the maturity date.
Combinations that support deductions include vertical spreadsExcluding calendar spread and diagonal spread
2Margin reduction of cross-style strategy
The straddle strategy (Straddle) consists of a call option and a put option with the same option size and maturity.
The combined position of the straddle strategy (Straddle) will receive a margin reduction, which depends on the respective margin requirements of the two options.
Contains: straddle strategy, wide straddle strategy
Which strategic margin deductions are supported?
As of March 2022, Futu has supported margin reduction of 5 categories and 17 kinds of option combinations, with a reduction rate of up to 100%.
Stock guarantee Strategy (covered call)-launched in October 2001
When holding a portfolio, there is no margin charge for Call short positions in the portfolio.
When holding positive shares, there is no deposit for hanging orders to sell Call.
Spread strategy (Spread)
When holding a portfolio, short positions in the Debit Spread portfolio do not charge a margin, and Credit Spread will collect a small amount of margin according to the exercise price.
When the position holder places an order and the short position forms Debit Spread, the short position will not collect the deposit of the hanging order.
Straddle Policy (Straddle) / wide Span Policy (Strangle)
No reduction or reduction for straddle long positions
When holding a straddle short position combination, the side of the combination with a small margin shall be exempted from the margin.
How to check the option portfolio margin?
Option issue order page-sell button, next to the $symbol-choose direction (buy or sell)-viewInitial margin的Changing valueIs the impact on the account margin after the current transaction of the order. When the option order triggers the combinatorial pairing logic, the margin will be deducted automatically.
Take a chestnut.
All margin deductions, take the vertical spread strategy of Ford stock as an example.
A $34 margin is required to buy an put with an exercise price of $16 due on March 18 ($34 here, the royalty for the option).
A put that expires on March 18 and has an exercise price of $15 requires a deposit of $378.07.
In the case of no margin reduction, the total margin required after the completion of the above two orders: $343,378.07$ 412.07.
After the margin deduction is launched, the margin required to buy put, which expires on March 18 and has an exercise price of $16, is still $43; at this time, another put with an exercise price of $15 expires on March 18 is sold with a margin of $0.
The margin of the second single call order is fully waived, and the deduction amount is US $373.04.
The margin situation of cross-style portfolio and stock guarantee strategy can be viewed according to the above logic, or you can click "related Reading" below for a more detailed interpretation of margin deduction.
Related readings:"the article understands how to reduce or reduce the margin of various strategic combinations."
Stocks in which markets are supported?
Us stock options and Hong Kong stock options are all covered.
Hong Kong stocks during the day and US stocks at night.
From day to night, the capital efficiency is full.
A little knowledge：
1, Debit Spread-debit spread option portfolio
There are two strategies:
1) Bull bullish spread combination (Bull Call Spread): buy a call with a lower exercise price and sell a call with a higher exercise price at the same time.
2) bearish bearish spread combination (Bear Put Spread): buy a put with a lower exercise price and sell a put with a higher exercise price.
Applicable scenarios:There are directional expectations for the target of the stock, and there are certain target prices and time points.
Benefits and risks:All are limited. The maximum benefit is the difference of the exercise price, and the biggest risk is the royalty paid.
2, Credit Spread-- credit spread option portfolio
There are two strategies:
1) bear market bullish spread combination (Bear Call Spread): buy a call with a higher exercise price and sell a call with a lower exercise price.
2) bearish spread combination (Bull Put Spread): sell a put with a lower exercise price and buy a put with a lower exercise price at the same time.
Applicable scenarios:There are directional expectations for the target of the stock, and there are target prices and time points in the opposite direction.
Benefits and risks:All are limited. The maximum return is the premium, the difference between the maximum risk exercise right price.
Under the market shock, risk aversion spreads, and it is a good strategy if you can follow the trend and seize the opportunity. I hope the new news on the option portfolio margin offer brought by Niuniujun today will allow you to see life in a desperate situation, and I also hope that the "Black Swan" will fly away quickly and world peace.