To The Moon

Speaker: Benedict Lim, U.S. options trainer and host of one of Singapore's largest retail investor meetup groups, as he explains options from scratch for first-timers using one simple idea: buying a house.

[About the Speaker] Benedict Lim is the host of one of the largest retail investor meetup groups in Singapore, and a stock market trainer on U.S. options with over 15 years of experience in the stock markets. He is also a veteran of the banking industry, having worked at top global banks including Standard Chartered, DBS and HSBC, with over a decade as a financial analyst, business analyst and wealth manager.

[The Hook] Benedict opened by tackling the reputation head-on: options are called dangerous, but he argued the danger comes from not knowing what you are doing. Driving a car is dangerous if you never learned how, and much less so if you have. Markets and options work the same way, which is why he put education first. He also polled the room on who had traded options before. Only a handful had, and even fewer had done so more than a couple of times, so he promised to keep things simple.

[Option = The Right to Buy a House]

Benedict's core analogy: you want to buy a Singapore property worth S$1 million. Instead of buying outright, you pay the seller a small deposit (about 1%, say S$10,000) to lock in the price. You now have the right, not the obligation, to buy that house at S$1 million.

• If the house rises to S$2 million, you can buy at S$1 million and capture the gain. Your profit is large compared with the small deposit you put down.

• If the house falls below S$1 million, you simply walk away. Your maximum loss is the deposit, not the value of the house.

That deposit is the premium, and the contract is the option. Compared with buying the house outright, you tie up far less capital.

[Calls and Puts]

• Call option — the right to buy at an agreed price. This is the house example above.

• Put option — the right to sell at an agreed price. The opposite.

Every option has two sides. The buyer holds the right. The seller collected the deposit and took on the obligation.

[Why Selling Can Be Safe or Dangerous]

Benedict drew a clear line here:

• Covered call — you already own the house and sell someone the right to buy it. If nobody takes it up, you keep the premium and can sell again next month, rolling the position until someone does. You own the asset, so the risk is covered.

• Selling without owning — if you sell the right to buy a house you do not have, and the price jumps, you must still deliver. The risk is very high. His advice: make sure you have the house first.

He stressed that you need to understand both sides of an option. Learning only one side leaves you with one strategy, and no single strategy works in every market.

[Size Is Where People Get Hurt]

Because an option costs so little, it is tempting to buy a lot. Benedict's example: if you can afford one house deposit, why not fifty? A single option contract covers 100 shares, so the numbers add up fast. When the position goes against you, your loss multiplies with it. His verdict: there is nothing wrong with options themselves. The danger is oversizing without understanding.

[Key Takeaways]

• An option is a right, not an obligation. The buyer's maximum loss is the premium paid.

• Calls and puts are mirror images, and every trade has a buyer and a seller.

• Covering your position matters. Selling against something you own is very different from selling without it.

• Position size decides how much a mistake costs.

[Call to Action 🎯]

1. In your own words, explain the house analogy to a friend. If you can, you understand the basics.

2. Open a stock on the Tiger app and find where its call and put options are listed.

3. Drop a comment: which side of an option, buyer or seller, do you feel more comfortable with, and why?

Markets are always moving - and sometimes, the best move is knowing what works for you.

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