POEMS US Options Trading June 21, 2023

POEMS US Options Trading

Table of contents

  • 1. What is an Option?
  • 2. Basic Options Strategies
  • 3. Trading Options with POEMS

What is an Option?

An Option is a contractual agreement between two parties, the buyer and the seller. The contract gives the right to the buyer of the Option to buy/sell a certain number of underlying assets from the seller of the Option at the exercise (strike) price within a specified time in the future.

The buyer of the option holds the right, but not the obligation, to buy or sell the underlying asset within the specified time. The seller of an Option does not have such rights and can only assume that the obligation is as stipulated in the contract.

An Example

Upon purchase of a new car, it is necessary to purchase precautionary insurance before driving it. When purchasing an insurance policy, be it for automobiles, health, life, or home, a premium has to be paid to secure the provided coverage. This payment mirrors the role of the option buyer plays in the market. However, it is common for individuals not to require the use of their insurance, resulting in the insurance company retaining the funds paid. This reflects the role of the Option seller.

POEMS US Options Trading

Basic Options Strategies

Long Call

When you pay a premium for a long call option, it gives you the right to buy the underlying stock at a specific strike price stated in the call option. Calls may be used as an alternative to outrightly buying the stock. You can earn a profit if the stock rises, without taking on the downside risks that would result from owning the stock.

Long Call Option Strategy

POEMS US Options Trading

As seen in the profit and loss chart above, as the share price increases, the value of the Option will continue to rise; to an ideal level of unlimited profit. Subsequently, the risk for buyers of a call option is only limited to the premium paid on the call option.

POEMS US Options Trading

Long Put

A long put option gives you the right to sell the underlying stock at the strike price. The long put option can be used as an alternative to shorting the underlying stock. You can profit if the stock price drops, without taking on the downside risks that would result from shorting of the stock.

Long Put Option Strategy

POEMS US Options Trading

As seen in the profit and loss chart above, as the share price decreases, the value of the option will continue to rise; ideally to a level of unlimited profit or until the share price reaches 0. Subsequently, the risk for buyers of a long put option is only limited to the premium paid on the put option.

POEMS US Options Trading

Covered Call

A covered call strategy involves selling a call option to collect premiums as income. However, for this strategy, you will need to have the underlying stock before you can execute this strategy. Selling a call option obligates you to sell 100 shares of the underlying, which would be a bad idea if you do not already own the shares. Without the shares at option expiry, you will be required to buy 100 shares from the open market, then deliver them to the option buyer at the strike price.

Covered Call Option Strategy

POEMS US Options Trading

If you already own the shares of the underlying stock, and the call option buyer decides to exercise the option, you will be obligated to deliver the 100 underlying shares at the specific strike price. In this case, you will earn the premium of the Options and also the amount from delivery of the underlying at the strike price (this strike price can be your ‘take profit’ level for the underlying stock).

In another scenario, if the stock does not rise past the strike price and the call expires worthless, the seller of the call option will keep both the entire premium and the underlying shares.

POEMS US Options Trading

Protective Puts

A protective put strategy includes a long put option and a long position of the underlying shares. Buying a put option allows the buyer to protect the value of stocks already owned in the event of a systemic risk or company-specific risk. The long put position acts as insurance against a drop in the underlying share price.

Protective Puts Option Strategy

POEMS US Options Trading

With a long position in the underlying shares, profit will continue to increase as the share price increases. However, the losses will be limited as a put option is put in place (to safeguard in case of a fall in share prices). Therefore, this strategy is called the protective put as investors protect their long position using a put option.

POEMS US Options Trading


A straddle strategy comprises a long call position and a long put position with the same strike price and the same expiration date. This neutral Options strategy is commonly utilized when the buyer of the Options expects a large price movement in the underlying shares in either direction which usually occurs during earning announcements with unpredictable results.

Straddle Option Strategy

POEMS US Options Trading

With a long position in both call and put, profit is virtually unlimited if the price of the underlying shares continue to rise or fall. The Straddle strategy will only profit if the underlying shares rise or fall from the strike price by a sum greater than the total premium paid.


Similar to any short-term call/put Options, Long-Term Equity Anticipation Securities (LEAPS) are Options contracts with a year or more till expiration. The benefit of LEAPS is that it closely mimics the stock price movement, allowing investors to benefit from potential price rises while utilizing less capital as compared to outrightly buying the stock.

LEAPS put is also used to hedge investors’ portfolios against any adverse market movement. This method of hedging is known as the protective put strategy mentioned earlier in this article.

For more information on POEMS Options Strategies, please visit our website.

Trading Options with your POEMS account

Trading Details

Minimum trade size: 1 contract which generally covers 100 underlying shares

Action Requirement
Long Call Option premium
Long Put Option premium
Short Call Underlying asset

For positions that cannot meet the obligation of the Options contracts (including auto-exercise) with the exposure risk deemed as excessive, POEMS will adopt one of the handling methods below. Any proceeds will be credited/debited to the client.

  • Liquidate Options prior to the expiration
  • Allow the Options to lapse
  • Allow/take delivery and liquidate the underlying

POEMS does not allow the exercising of Options, all open positions should be rolled forward prior to the expiry of the contract; otherwise they will be force closed by end of the trading session on expiry day.

The US stock option tab will only reflect positions and balances relating to the US stock option. All trades are denominated in USD.

Order Details

Order Placement Via

  1. POEMS Mobile 3 App
  2. Night dealer (US Trading Hours)
Trading Lot (Minimum trade size) 1 contract which generally covers 100 underlying shares
Minimum bid size 0.01

POEMS Brokerage Charges

Commission $0.88 per contract, minimum $2.88 per order
Securities and Exchange Commission (SEC) Fee 0.0008% (sell trades only)
Trading Activity Fee Applicable only for sell trades at $0.00244 per contract
$0.000145 per share, subject to maximum of $7.27
(for Assigned calls/ Exercised Puts on the underlying)
Option Regulatory fee (ORF) $0.02905 per contract
OCC Clearing Fees $0.02 per contract, subject to maximum of $55 per trade
Exercise/Assignment Fee $2.00 per exercise/assignment.

Trading Hours

Singapore Time 09:30pm – 04:00am (Daylight Saving Time)
10:30pm – 05:00am (Non-Daylight Saving Time)
US (Eastern) Time 9:30am – 4:00pm

*Order placements are allowed only during regular trading hours, any order submitted outside of regular trading hours will be rejected.


Option Settlement Date T+1 market days
Underlying Settlement Date T+2 market days
Order Amalgamation No
Settlement Currency USD only

1. Should the due date coincide with Singapore public holiday/s – The due date will follow the traded market’s due date

US Options Live Price

US Options live price feed is available for subscription FOR FREE on POEMS 2.0 if you are a non-professional investor. Each subscription is valid for 12 months.

Do note if you do not subscribe to the price feed, option prices displayed are delayed by 15-30 minutes.

Only the option prices are live, in order to have accurate IV/Delta/Gamma, investors are advised to subscribe to both US Equities and Options live prices.


How to open an Options account in POEMS 3: tutorial

How to trade US Options: tutorial

For more information about Options Trading on POEMS, you can visit our website, or reach out to our Night Desk representatives at 6531 1225. Don’t delay and start registering for the Options account right away

Strategy For Sentiment Risk Reward Payoff Chart
Long Call Directional Bullish Higher risk/reward ratio

Time Decay

POEMS US Options Trading

Long Put Directional Bearish Higher risk/reward ratio

Time Decay

POEMS US Options Trading

Covered Call Income from holding underlying or taking profit level Neutral Opportunity Cost

Risk of holding onto underlying shares whose prices are dropping significantly

POEMS US Options Trading

Protective Put Insurance on holding underlying Bearish Total cost is increased by the premium of the put Options Unlimited

POEMS US Options Trading

Straddle Anticipation of big moves in either direction Neutral High cost of premium

Requires large movement in the underlying share prices

POEMS US Options Trading


These commentaries are intended for general circulation. It does not have regard to the specific investment objectives, financial situation and particular needs of any person who may receive this document. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of the units and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. Investors may wish to seek advice from a financial adviser before investing. In the event that investors choose not to seek advice from a financial adviser, they should consider whether the investment is suitable for them.

The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.

Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.

Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you


This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  


Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com