FUTU HK Help Center-Why is the margin requirement higher for close-to-expiry options?

Why is the margin requirement higher for close-to-expiry options?

Close-to-Expiry options are options that are within 5 trading days to expiry.

At expiry, your position may undergo the following changes:

1. When you have a long call position that is exercised, it will become a long position of the underlying stock, and the account will deduct the cash required to establish the position.

2. When you have a long put position that is exercised, it will become a short position of the underlying stock, and the account will increase the amount of cash corresponding to the short position.

3. When you have a short call position that is assigned, it will become a short position of the underlying stock, and the account will increase the amount of cash corresponding to the short position.

4. When you have a short put position that is assigned, it will become a long position of the underlying stock, and the account will deduct the cash required to establish the position.

To better monitor the risks associated with the possible option exercises on the expiration day, Futu begins to calculate the margin and settlement requirements for options that are in-the-money or close to in-the-money (close meaning within 1% of the exercise price) on the day of expiration. Not having enough funds for the potential exercise, will lead to the account being marked as "dangerous" from a risk control perspective. Customers should ensure the account has sufficient liquidity for option exercise via closing positions or injecting more funds.

In the case that your account is marked as "dangerous", Futu reserves the right to perform the following actions: 1) liquidate your option positions; 2) waive your right to option exercises; 3) execute the option exercise but close the corresponding stock positions afterwards, etc.

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"Leaving the Group - Raising Taxes - Tweeting: The 'Money Making Strategy' of the Most Wild Gemini in Contemporary Times"

It's said that Trump is a walking drama machine, raising tariffs today and praising China tomorrow, making stock investors feel like they are on a roller coaster every day. But if you have seen hisThe Art of Trade, and then take another look at hisGemini horoscope—Wow! This guy's approach is simply the business version of "Empresses in the Palace", with every step marked by the four big characters "I want to make money".
The main core strategy in the book "The Art of Trade" is the combination of business thinking and the art of gaming.
Its core logic can be summarized into the following five dimensions:
1. The underlying logic of "creating momentum" and "the combination of reality and illusion".
The book emphasizes "always let the other party make the first offer" and "exaggerate demand to gain leverage."

This strategy is often seen in tariff policies and trade negotiations.
[Example]
By imposing tariffs on various countries to create pressure, opponents are forced to the negotiation table, and then an agreement is reached through phased concessions.
II. Practical Application of the "Big Negotiation" Strategy

First, he scared everyone quite a bit, and then he gave a little reward.Imagine you are bargaining in a vegetable market, and Trump's approach is to first raise a loudspeaker and shout: "This pile of cabbage must be sold to me for 100 yuan today!" When the vendor is stunned, he suddenly rubs his hands and says: "But seeing that you are not having an easy time, let's settle for 80 yuan~"

[Example]
1. In 2018, tariffs were imposed on CN commodities, turning the global stock market into a green wilderness. Just when everyone was about to collapse, he suddenly signed a first-phase agreement and triumphantly tweeted: "No one understands deals better than I do!"

2. On April 2, 2025, ...

Why is the margin requirement higher for close-to-expiry options?

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