The Hong Kong stock option market adopts electronic trading. You can easily set and modify the information of an order, and place it quickly to complete a trade. While electronic trading makes trade convenient, your orders, even if set at unreasonable prices, may be submitted quickly into the market. Once such orders are executed, you might incur unnecessary losses.
In order to protect your account rights and interests, we conduct a price deviation check before your option order is submitted, and block it as much as possible if the order price is unreasonable.
E.g.:
You set a limit order to buy a stock option contract on the underlying stock XYZ at HK$6.5, but the last traded price of the contract was HK$4. If the limit order is submitted, you may immediately get a contract for HK$6.5. However, during the trading period, the price of the underlying stock may not change, which means the reasonable price of the option contract may still be HK$4. In this case, you may suffer an instant loss of HK$2.5 per contract. With a price deviation check, such order can be blocked, so that you can avoid a loss.
All option orders (single leg) you place are subject to a price deviation check. If an order is executed at a price deviating significantly from the current market price, it will be recognized as an error trade by the Hong Kong Stock Exchange. Therefore, during a price deviation check, we will refer to the error trade recognition criteria of the Hong Kong Stock Exchange, and if your order may lead to an error trade, it will be blocked to protect your account rights and interests.
The Hong Kong Stock Exchange has prescribed the error trade price parameters for stock options as follows:
| Order Type | Price Parameter |
| Stock Option Order | 1. The difference between the trade price and the Reference Price is such that it exceeds 3 percent of the nominal price of the underlying security (as defined in the Exchanges Rules) at the time the trade occurred; or 2. The difference between the trade price and the Reference Price is such that it exceeds 2 times the maximum spread permitted under Market Maker Obligations (as detailed in the Second Schedule of the Options Trading Rules) for the option series, and the difference represents at least 30 percent of the Reference Price. |
| Stock Option Combination Order | The trade price of a Tailor-Made Combination trade is such that it exceeds whichever is the greater of: 1. 30 ticks from the Notation/Reference Price of the Tailor-Made Combination trade concerned; or 2. 10 percent from the Notation/Reference Price of the Tailor-Made Combination trade concerned. |
Notes:
1. If the Hong Kong Stock Exchange adjusts the error trade price parameters, the price deviation check rules will be adjusted accordingly.
2. Due to the availability of data, our price deviation check rules are not necessarily consistent with the relevant standards of the Hong Kong Stock Exchange.
3. The price deviation check feature serves only as an auxiliary tool, and clients shall be solely responsible for instructions issued by them, and should not rely on this feature for the rationality and accuracy of their orders. Futu Securities does not guarantee that this feature can block all orders that may lead to error trades or that the parameters used for this feature are accurate. Futu Securities shall not be held liable for any loss arising from or in connection with its acceptance of clients' instructions.
4. For the error trade price parameters of the Hong Kong Stock Exchange, please refer to its website.