1. Futures
1.1 Transaction currency: HKD, USD, CNH, JPY
1.2 Transaction method: You don’t really need to pay the order amount to open a position. You can do so as long as your maximum buying power can cover the margin.
1.3 Order type:
• Hong Kong futures: You can place limit orders, market orders, at-auction market orders, stop limit orders, stop market orders, limit if touched orders, market if touched orders, trailing stop limit orders, and trailing stop market orders. In particular, at-auction market orders need to be placed during the pre-market opening period.
• US futures: You can place limit orders, market orders, stop limit orders, stop market orders, limit if touched orders, market if touched orders, trailing stop limit order, and trailing stop market orders.
• Singapore futures and Japan futures: You can place limit orders, market orders, stop limit orders, stop market orders, limit if touched orders, market if touched orders, trailing stop limit order, and trailing stop market orders.
1.4 Closing principle: first-opened first-closed. It means positions opened first are closed first.
1.5 Settlement mechanism:
• Cash settlement: Futures contracts that are still open after the last trading day will be settled without any special operation.
• Physical delivery: Futu does not support physical delivery for commodity futures, and you need to close your positions before the first notice day or the last trading day.
2. Hong Kong Index Options
2.1 Transaction currency: HKD
2.2 Transaction method: You don’t really need to pay the order amount to open a position. You can do so as long as your maximum buying power can cover the margin.
2.3 Order type: You can place limit orders, stop limit orders, limit if touched orders, and trailing stop limit orders.
2.4 Style: European
2.5 Settlement method upon exercise: cash settlement
2.6 Settlement on the maturity date:
• If your positions remain open till the last trading day, HKFE Clearing Corporation Limited will automatically exercise all in-the-money call options (i.e. call options with strike prices lower than settlement prices) and all in-the-money put options (i.e. put option with strike prices higher than settlement prices);
• Cash settlement will be made at the 「official settlement price」.
3. US Futures Options
Futures Options available for trade in the US market have the following criteria:
3.1 Transaction currency: USD
3.2 Transaction method: Options buyers pay a premium, while sellers collect premiums and must provide margin.
3.3 Order type: Select any order type for the trade, such as limit order, market order, stop limit order, stop market order, limit if touched order, market if touched order, trailing stop limit order, and trailing stop market order.
3.4 Closing principle: First In First Out (FIFO), positions opened first are closed first.
3.5 Style: European or American
3.6 Settlement mechanisms:
• Physical delivery: The underlying futures contracts are delivered on the specified date at the execution price of the option, rather than being traded with offsetting contracts. For more details on physical delivery, please refer to this article US Futures Options Physical Delivery.
• Cash settlement: The contract terms are fulfilled by paying or receiving the in-the-money amount in dollars at expiration, rather than delivering or receiving the underlying futures contracts.
Note: Out-of-the-money options will expire worthless.
Exercise or assign Futures Options
Options are usually automatically exercised based on the final settlement price on the expiration date. However, American-style options may be subject to early exercise or assignment.
• Option buyer: On the expiration date, out-of-the-money options will expire worthless with no actions taken, while in-the-money options will be automatically exercised.
• Option seller: When an option is exercised, any open short positions will be randomly paired with the exercised options during settlement. Once your account is assigned, it must be settled according to the option's delivery mechanism.
Normally, in-the-money options are automatically exercised at expiration. If you have a short position on an in-the-money option at expiration, you will be assigned.
However, during actual trades, option buyers may choose not to exercise or exercise early based on their trading strategies which may affect the option seller. In these cases, the option seller may not be assigned if the buyer chooses not to exercise, or may be assigned with an out-of-the-money option if the buyer exercises.
Note: We currently do not support the forfeiture of options. If you get a Margin Call, you can either sell your options, sell other investments to cover it, or deposit more funds to make sure you have enough for the exercise.
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.