Options trading in Singapore involves buying or selling contracts that give the holder the right (but not the obligation) to buy or sell an underlying asset at a specified price (the strike price) before or on a specified date (the expiry date). Options on SGX-listed securities and global indices are accessible to Singapore investors through licensed brokers and international platforms. This page is for general information only and does not constitute financial advice.
Call Options and Put Options
There are two fundamental types of options:
- Call option: Gives the buyer the right to buy an asset at the strike price. Profitable when the underlying price rises above the strike + premium paid.
- Put option: Gives the buyer the right to sell an asset at the strike price. Profitable when the underlying price falls below the strike − premium paid.
Options Trading in Singapore Context
SGX lists options on Singapore stocks and the STI (Straits Times Index) via SGX Derivatives, though the market depth is limited compared to US options markets (CBOE). Most Singapore investors who trade options do so on US equities and ETFs through platforms like Interactive Brokers (IBKR), Tiger Brokers, or Webull — all accessible from Singapore.
Key Options Terminology
| Term | Definition |
|---|---|
| Premium | Price paid to buy an option contract |
| Strike price | The price at which the option can be exercised |
| Expiry date | The last date the option can be exercised |
| In-the-money (ITM) | Option has intrinsic value (exercising now is profitable) |
| Out-of-the-money (OTM) | Option has no intrinsic value (exercising now is unprofitable) |
| IV (Implied Volatility) | Market’s expectation of future price volatility — higher IV means pricier options |
Popular Options Strategies for Singapore Investors
Beyond buying calls and puts, many Singapore investors use options strategies to generate income from existing stock holdings:
- Covered call: Sell a call option on stocks you own to earn premium income
- Cash-secured put: Sell a put option with cash set aside to buy the stock if assigned — a way to acquire shares at a lower price while earning premium
- Protective put: Buy a put to hedge downside risk on holdings (similar to insurance)
Tax Treatment of Options in Singapore
Singapore does not have capital gains tax, so profits from options trading are generally not taxable for individuals trading for their own account. However, if options trading is deemed a business activity (frequent, systematic trading), MAS and IRAS may treat profits as income. Consult a tax advisor for your specific situation. For long-term investors, the Dividend Portfolio Yield Calculator and Best S-REITs 2026 guide offer lower-complexity income strategies.