Want to learn about options trading, fellow Singaporean?
What’s the trading option scene in Singapore like? Ever since the beginning of stock options trading in the US market, stock trading options, as one of the most versatile financial instrument in the world today has found its place in major stock markets world wide as a popular hedging and speculative tool. Options trading, which was once exotic and complex, is now one of the mainstream investment methods in the world today.
Options trading is also extremely popular in Singapore especially after the 1990s. In fact, options trading seminars are held in Singapore almost every weekend with speakers both coming from overseas as well as locally. Singapore also produced a few famous options trading gurus such as Mr. M. Kishore as well as Master Jason Ng of Masters ‘O’ Equity Asset Management. This article will explore the history and how-to of options trading in Singapore.
The Options Trading Scene In Singapore
There are 2 main classes of options traders in Singapore; One learns and trades exclusively in the US market through online options trading brokers and the other trades “Structured Warrants” in the Singapore market.
Why Singaporeans Trade Options In The US Market
Options trading in the US market was made popular through options trading seminars and made possible by the popularization of online options trading brokers that accepts Singaporean accounts. Singaporeans could conduct options trading directly in the US market through these online broker accounts and have their money conveniently wired to and from their accounts. Singaporeans who trades options in the US market do so because it is the biggest and most liquid options market in the world, resulting in much more trading opportunities and grants exposure to international blue chips. Standardized stock options in the US Market also comes with a lot more strike prices across much more expiration dates, allowing the use of complex options strategies. So far, almost all options seminars in Singapore teaches and promotes options trading in the US market.
Options Trading Clubs & Societies
There are many private options trading clubs and societies in Singapore that anyone with an interest in options trading can join. These options trading clubs in Singapore organizes regular meetups in order to share options trading experience and invites renowned speakers once in a while. One of the most popular is the Options Trading Club Singapore. There are also plenty of forums and websites set up by Singaporeans discussing options trading. To date, most of these options trading clubs and societies also concentrate on options trading in the US market rather than structured warrants trading in the Singapore market.
Popularity Of Options Trading In Singapore
Popularity of options trading in Singapore definitely soared in the 2000s. At the time of this writing, so many Singaporeans searched for options trading information on the internet that according to the keyword data provided by Google, the biggest number of search for the keyword “Options Trading” came from Singapore while the USA only ranked number 5! What is most amazing is that Singapore has a population of only slightly over 4 million at the time of this writing! The explosion in the popularity of options trading was ignited by the number of advertisements featuring options traders who made thousands of percent in trading return as well as options traders who went from rags to millionaires. Even though most of these reports are isolated cases that does not represent the true picture of options trading in general, it still started a wave of intense interest amongst the internet and investment savvy Singaporeans.
Main Options Trading Tools In The Singapore Market
There are 2 main options trading tools in the Singapore market; Equity Index Options & Structured Warrants.
What Are Warrants?
Warrants are contracts between the issuer and the investor which allows the investor the right but not the obligation to buy or sell the underlying stock at a fixed strike price during expiration like an European style stock option and are securitized so that they can be traded exactly like a stock in a derivatives exchange. The underlying security in a warrant is delivered by the issuer upon exercise rather than by an investor holding the shares. Warrants are often issued along with IPOs in order to encourage the sale of the shares when the warrants are exercised upon expiration. There are 2 main types of warrants traded in the Singapore market; Structured Warrants and Investment Warrants.
What Are Structured Warrants?
Structured Warrants are the Singapore market equivalent