1. Why Are Many Investors Choosing Options?
Options are not a substitute for stocks; rather, they are a tool suited to different investment objectives.
Compared with buying or selling stocks directly, options have several distinctive characteristics:
• You can take different directional positions according to your view of a rise or fall in price.
• When buying options, the maximum loss is generally limited to the premium paid.
• You can structure strategies around specific events such as earnings releases and other major catalysts.
• For the same underlying stock, you can select contracts with different risk-return profiles by choosing different expiration dates and strike prices.
2. What Is a Stock Option?
A stock option is not a stock. It is a “right.”
It grants you the right to buy or sell a stock at a predetermined price on or before a specified future date — but not the obligation to do so.
What you purchase is an opportunity, not an obligation.
3. Which Market Conditions Warrant Attention to Options?
Options need not be traded every day; they tend to be most relevant around higher-volatility events, for example:
• Company earnings reports (e.g., NVIDIA, Tesla, Apple)
• Major news across the AI supply chain
• Federal Reserve interest-rate decisions
• Key U.S. economic data such as CPI and non-farm payrolls
• New product launches, significant policy developments, and similar events
Around such events, you may open the BIT app and go to [U.S. Stocks] to review the available options opportunities.
4. Four Basic Ways to Trade Options
Strategy | Market View | How It Works | Suitable Scenarios | Maximum Profit | Maximum Loss |
Buying a Call (Long Call) | Bullish | Buy a call | Expecting the share price to rise — e.g., better-than-expected earnings or positive developments | Theoretically unlimited | The premium paid |
Buying a Put (Long Put) | Bearish | Buy a put | Expecting the share price to fall — e.g., weaker-than-expected results or a market pullback | Approaches its maximum if the share price falls to zero | The premium paid |
Selling a Covered Call | Moderately bullish / range-bound | Hold the stock while selling a call | Already holding the stock and seeking to earn additional premium income | The premium received plus any stock appreciation up to the strike price | Losses from a decline in the stock price (partially offset by the premium received) |
Selling a Cash-Secured Put | Moderately bullish / willing to buy on a dip | Set aside sufficient cash and sell a put | Seeking to buy a desired stock at a lower price while earning premium income | The premium received | If the stock falls sharply, you must buy it at the strike price and may incur substantial losses |
BIT currently supports buying call options (Long Call) and buying put options (Long Put). When used as standalone strategies, the maximum loss for the buyer is generally limited to the premium paid.
5. How Do Options Differ from Buying Stocks Directly?
Stocks and options are not substitutes for one another; they serve different investment objectives. For example:
Dimension | Buying Stocks | Buying Options (Call / Put) |
What do you acquire? | Ownership of the stock | The right to buy or sell the stock at an agreed price within a set period |
Direction of the position | Profits mainly from a rise in the share price | Allows participation based on either a bullish (call) or bearish (put) view |
Holding period | No fixed term | Has an expiration date; the contract expires thereafter (if not closed out or exercised) |
Risk profile | A decline in the share price results in a loss | When buying options, the maximum loss is generally limited to the premium paid |
Who is it suited to? | Long-term holders and value investors | Investors with a clear view on short- to medium-term movements or specific events (such as earnings) |
You may consider buying stocks if:
• You wish to hold high-quality companies over the long term.
• You focus more on a company’s long-term growth.
• You prefer not to be constrained by an expiration date.
You may consider options if:
• You have a specific view on short-term price movements.
• You wish to position around earnings or major events.
• You can accept the risks specific to options (such as time-value decay).
6. Three Concepts to Know Before Trading
• Strike price: the agreed transaction price.
• Expiration date: the last date on which the option is valid.
• Premium: the price paid to purchase the option.
Strike price + expiration date + premium — these are the most important details of any option contract.
7. What Is the Breakeven Point?
A common misconception among beginners is that a call will necessarily be profitable simply because the share price has risen. This is not necessarily so, because you have already paid the premium.
You only begin to profit once the share price moves beyond the breakeven point.
• Call: breakeven point = strike price + premium
• Put: breakeven point = strike price − premium
8. Options Trading Hours
At present, most U.S. stock options can be traded only during regular U.S. market hours:
• Eastern Time (ET): 9:30–16:00
• During Daylight Saving Time (March–November), the above corresponds to 21:30–4:00 (UTC+8).
• During Standard Time (November–March), the above corresponds to 22:30–5:00 (UTC+8).
9. Example: Buying a Call Option (Long Call)
Suppose you believe that Rocket Lab (ticker: RKLB) will report results exceeding market expectations and that its share price is likely to rise. You therefore decide to buy one RKLB call option.
Item | Value |
Current share price (illustrative) | US$76 |
Strike price | US$80 |
Premium | US$2 per share |
Contract size | 100 shares |
Total premium paid | US$200 |
After the purchase, you obtain the right — but not the obligation — to buy 100 RKLB shares at US$80 per share on or before the expiration date.
10. Three possible outcomes at expiration
Scenario 1: The share price falls to US$70
The market price is below the strike price. Exercising would mean buying at US$80, whereas the market price is only US$70 — clearly unfavorable. Accordingly, most investors would generally choose not to exercise.
Net loss: US$200 (the premium paid).
Scenario 2: The share price rises to US$80
Although the share price has risen to US$80, your cost still includes the US$2 premium, so the position has not yet covered its cost. The result is still a loss of US$200.
Scenario 3: The share price rises to US$85
You hold the right to buy the stock at US$80, while the market price is US$85 — a gain of US$5 per share. After deducting the US$2 premium, the net profit is (85 − 80 − 2) × 100 = US$300.
11. How to Trade Options on BIT
Step 1: Open the individual stock page.
Step 2: Tap the options icon.
Step 3: Select “Bullish” (call) or “Bearish” (put).
Step 4: Select “Buy.”
Step 5: Enter the desired price and quantity to place the order.
BIT currently supports a broad selection of actively traded U.S. stock options. We periodically assess product risk and plan to expand the range of tradable options over time.