What is Options Strategy Trading?
Options Strategy Trading refer to the process of placing a single order that combines different options contracts of the same underlying stock with varying strike prices, directions, or expiration dates. The individual options within the combination can have the same or different buying or selling directions. Options Strategy Trading offer high flexibility, allowing investors to customize their positions based on factors such as risk tolerance, expected returns, and market views. However, they also require investors to have a deep understanding of options trading, including options pricing, risk management, and exercise strategies. Currently, Tiger Brokers supports all 2-leg options combinations, including common strategies such as Vertical, Straddle/Strangle, Calendar/Diagonal, and more.
Basic rules to know before Options Strategy Trading
Account: Prime Account - Margin
US stock and ETF options supported, MLEG orders are not supported for index options yet
Allow placing limit order during market hours, order cancellation and modification is supported
The maximum order quantity cannot exceed 2,000 contracts, and the maximum order amount cannot exceed USD 3 million
Margin reductions are available for multi-leg orders based on the corresponding strategy type
How to place a multi-leg order on Tiger Trade
*make sure to apply for internal testing ahead
Where to find: Option Chain(find the new component at the bottom), option detail page(find 'multi-leg' at the bottom navigation)
How to place a multi-leg order:
Find a stock -> click "Options" -> click "Single Option" dropdown -> select an option strategy -> select a option combo -> place new order
Just a few heads up
The estimated "Debit" on the order page represents the total premium amount you need to pay, while the estimated "Credit" represents the total premium amount you can receive.
The liquidity of multi-leg options orders is generally lower than that of single-leg options. Investors can increase the probability of execution by actively monitoring and modifying orders in real-time.
"My Positions" dynamically matches option combos based on optimal margin requirement. Please pay attention to the Excess liquidity in your account.
Currently, the option combos in the "My Positions" are dynamically adjusted based on optimal margin requirements, which may differ from the combos at the time of order placement.
*It is expected that a new version of "My Positions" will be released in Q3, which will display option combos as it was at the time of placing an order.
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