Currently, margin relief is available for the following strategies, details are as follows:
(1) Covered Call:
Strategy Composition: Short call options + Long positions in the underlying stock corresponding to the contract size (must be in whole lots).
Margin Relief:
When holding a sufficient number of long positions in the underlying stock, selling out-of-the-money call options will not freeze the margin portion for the options.
When holding a sufficient number of long positions in the underlying stock, selling in-the-money call options will only freeze the margin amount for the order at the in-the-money amount * (1 - long position margin percentage of the underlying stock).
Additional Note: For risk control considerations, the overall margin for the strategy must not be lower than the option margin; therefore, the frozen margin for selling call options may be higher than the amounts mentioned above.
(2) Short Call and Put:
Strategy Composition: Short position in one call option + Short position in one put option. To form the strategy, the following conditions must be met: The underlying and expiration date are the same, and the strike price of the put option is less than or equal to the strike price of the call option.
Margin Relief:
When the call option margin > put option margin, the strategy margin is: Call option margin + Put option market value
When the put option margin > call option margin: The strategy margin is: Put option margin + Call option market value
Note:
If you liquidate part of your position in the option strategy, the option strategy will be invalidated and you will no longer be offered margin relief, which may result in a decrease in the risk value of your account. Please ensure that you have sufficient funds in your account before liquidating your position in the option strategy as forced liquidation may occur when EL<0.
For strategies involving stocks, if you need to liquidate part of your positions in the option strategy, we recommend liquidating the option positions in the option strategy first to avoid an increase in margin caused by the liquidation. If you liquidate the underlying stock positions in the option strategy first but only partially filled, the option strategy will lapse, resulting in both option positions and stock positions in your account. The sum of their margins will be higher than the option strategy's margin requirement, thereby increasing your account's margin.
Please note that the option strategies cannot currently be applied to some positions whose relevant symbols or contract multipliers have changed due to corporate actions such as split and merger. If a position in the option strategy is subject to such corporate action, this may result in the option strategy invalidating and thus increasing the margin requirement. Please ensure that you have sufficient funds in your account before liquidating your position in the option strategy as forced liquidation may occur when EL<0.