FAQs
(1)What is the minimum trading unit for US stock options?
The minimum trading unit for US stock options is 1 contract, generally equivalent to 100 shares.
For example, SPY, with any call option that has the expiry date of March 11, 2016 and strike price of 195.5, the current price is USD2.1 and thus the contract value is USD2.1*100 = USD210.
(2)Are pre-opening and post-closing option transactions allowed?
No, options shall be traded in EST 9:30–16:15 (only some ETF options are traded until 16:15).
(3) When will the options be exercised?
Exercise at expiration: Options will generally be exercised or cancelled after the close of trading on the expiration date; if the expiration date is a holiday, the exercise or cancellation time may vary, please refer to the change in your account for details. Exercise in advance: The right party of the option, i.e. the buyer, support exercising the option in Tiger Trade APP; the duty party of the option, i.e. the seller, may be requested by the right party (buyer) to exercise the option in advance at any time.
(4)Can the brought options be closed out at any time before the expiry date?
The options, whether under long buying or short selling, can be closed out as per the market price at any time within the trading period before the expiry date.
(5)How to manage the options with inactive exercise or within exit price?
Automatic exercise will occur for stock options due within current month and at a price of USD0.01 or above, but close position will occur as per market price if the investor’s margin does not confirm to the exercise conditions, which is prexamited 2 hours before the market closes. If it is impossible to close out at market price due to insufficient liquidity or other causes, Tiger retains the rights of the invalid options, which process will result in the loss of entire value of such options.
(6)How to deal with the options, if the price of the brought options (whether call options or put options) is lower than 0.01 and the investor does not conduct active exercise or close out on the expiry date?
In such a case, the options will become invalid automatically and you will suffer from the loss of all option premiums. In general, active exercise (if any) will result in further losses at this point.
(7)Is it possible to find automatic avoidance, margin closeout and systematic exercise for options in transaction records?
Yes, you can click order details for relevant records and descriptions.
(8)Why is any option order not filed?
Option orders may be not filed for the following reasons:
i. Out-of-sync quotes from different exchanges make it impossible to file the orders timely;
ii. There are different tick sizes for different exchanges;
iii. Due to existence of combined order for options, the submitted unilateral buy/sell orders for options are not always filed. For baba’s an option brought at 4.40 and sold at 4.50, any 4.50 unilateral buy order may be not filed because it is just a part of a certain combined order;
iv. There is no market liquidity.
(9)What should I do if my account is unable to meet the margin requirement on the Option Contract Expiration Date out of options exercise or assignment?
Tiger usually calculate the required fund for exercising in-the-money or near-in-the-money options at any time on the date of expiration before close. In case of insufficient cash in your account, Tiger may liquidate positions in your account to prevent margin deficiency from option exercise. If you anticipate that you will be unable to meet the margin requirement after the option exercise, you should either close positions or deposit additional funds as expiration nears.
Tiger reserves the right to:
i. Forced liquidations prior to expiration,
ii. Allow the options to lapse,
iii. Allow options to be exercised and liquidate other positions.
(10) Stock options with which expiration date are available for trading?
Tiger supports stock options expiring on Fridays, as well as options trading on IWM, QQQ, and SPY with weekly expirations.
(11) How do corporate actions of the underlying stock influence my option holdings?
When there are corporate actions such as split/reverse-split, merger, spin-off, and delist, Tiger will adjust the options according to the OCC website in time, which may result in the changes of strike price, deliverable, and expiration date of your option holdings.
(12) Is early exercise supported?
Currently, Tiger only supports early exercise of US stock options. You can find it in 'Portfolio - More - Option Exercise'.
Notes: Activating 'Allow OTM options execution' indicates your instruction to exercise this option regardless of its moneyness on the Early-Exercise Date. Otherwise, the request for early exercise maybe revocable on account of the option being out-of-the-money.
(13) Why is early exercise revoked?
In the following scenarios, your Early Exercise will be revoked.
i.When your account has insufficient funds
ii.When there is a corporate action adjustment on the underlying stock of the option.
iii.When there is a corporate action adjustment of the option.
Ⅳ.When you are not activated 'Allow OTM options execution' and the contract is OTM.
Please make sure that you are fully aware of the above scenarios for revocation before requesting early exercise, and pay attention to the status of the early exercise request in a timely manner. The investor will be responsible for the profit and loss caused by the revocation.
(14) Is the do-not-exercise option supported?
Currently, Tiger only supports the do-not-exercise for US stock options. You can submit an application through 'Portfolio - More - Option Exercise' before the day of expiration at the close of the market.
Please note that in-the-money options which is not in the do-not-exercise process will be automatically exercised on the expiration date. If your account does not have sufficient funds to exercise options at "zero days to expiration", it may lead to forced liquidation. Please ensure the fund sufficiency of your account.
(15) Why is do-not-exercise revoked?
In the following scenarios, your do-not-exercise will be revoked.
i.When there is a corporate action adjustment on the underlying stock of the option.
ii.When there is a corporate action adjustment of the option.
Please make sure that you are fully aware of the above scenarios for revocation before requesting do-not-exercise, and pay attention to the status of the do-not-exercise request in a timely manner. The investor will be responsible for consequences caused by the revocation.
(16) Changes in margin requirement for the do-not-exercise option
After you submit an application, if the long call or put option becomes in-the-money during the expiration period, the system will not increase the position margin, and it will not automatically exercise upon expiration.
If you revoke the application, and the long call or put option becomes in-the-money during the expiration period, the system may increase the position margin.