Options Trading in Singapore (2026): A Beginner’s Guide to Calls, Puts and Option Chains

What happened?

Options trading has grown in popularity in recent years.

The Options Clearing Corporation (OCC) reported about 15.21 billion options contracts in 2025, up from about 12.22 billion in 2024, after a record 10.38 billion contracts cleared in 2022.

Options can be useful tools for investors who already understand equities, especially if you want to hedge risk, generate income, or express a market view with clearer downside limits than margin trading. 

But options also come with extra moving parts like expiry dates, time decay, implied volatility, and assignment.

Let us find out more about options trading, including the reasons to trade options, risks of options trading, and how to start options trading in Singapore. 

What are call options and put options?

In simple terms, call options and put options are two fundamental types of options contracts.

Like a stock has a share price, an option has a premium, which is simply the price you pay (or receive) for the contract. 

Premiums are usually quoted per share, but most US stock options represent 100 shares, so a premium of US$2.50 typically means about US$250 for one contract.

A call option gives the buyer the right to buy the underlying asset, such as a stock or ETF, at a fixed predetermined strike price on or before an expiry date. Importantly, it is a choice, not a requirement. If the market price does not move above the strike price, you can let the option expire or sell it earlier. 

Calls tend to increase in value when the underlying price rises, which is why traders often use them when they expect prices to go up.

A put option gives the buyer the right to sell the underlying asset, such as a stock or ETF, at a fixed predetermined strike price on or before expiry. Again, you are not forced to sell. If the market price does not fall below the strike price, you can let the option expire or sell it earlier. 

Puts tend to increase in value when the underlying price falls, which is why they are often used when you expect prices to go down, or when you want to hedge a stock position.

Next, let’s look at the options chain, which is where you select the specific contract you want to trade.

What is an options chain?

An options chain is a table that lists all available call and put options for a stock or ETF. 

It usually shows calls on the left, puts on the right, and strike prices in the middle, grouped by different expiry dates. Strike prices are the price you can buy (call) or sell (put) at.

You use it to choose an expiry and strike that matches your view and the time you are willing to hold the trade. 

The key columns to check are bid and ask prices, because the spread is a hidden cost that can make it harder to enter and exit at a fair price. 

It also shows volume and open interest, which help you gauge whether the contract is liquid enough to trade smoothly. 

Many chains also show IV, which stands for implied volatility which affects how expensive the option premium is.

Once you pick a contract, the chain will often display the Greeks like Delta (Δ), Theta (Θ), and Vega (ν) to help you understand what the option price is most sensitive to.

Here’s a useful way to frame it:

• If you are holding options, the Greeks tell you what risks you are taking.
• If you are selling options, the Greeks tell you what risks you are accepting in exchange for premium.

How options make or lose money

When you buy a stock, your profit and loss mainly depends on one thing: the share price moving up or down.

With options, you are paying a premium upfront, and you only profit if the move is big enough, soon enough, because the option has an expiry date.

In practice, you make money on options the same way you make money on stocks: you sell it for more than you paid. 

The difference is that what you are selling is the option premium, and that premium can change even when the stock barely moves.

A simple way to understand the premium is: 

• Intrinsic value: what the option is worth if it expires today.
• Time value: what you are paying for the chance the stock moves before expiry.

At expiry, time value becomes zero, so an option is worth only its intrinsic value. 

If it is still out of the money at expiry, any option that is still out of the money typically ends up worth zero. 

This is a big difference versus stocks, because stocks do not expire.

A quick example (call option)

Say a stock is at $100 and you buy a $105 call for a premium of $2.50.

• You pay $2.50 × 100 = $250 for one contract.
• At expiry, the call only has value if the stock is above $105.
• Your rough breakeven at expiry is $105 + $2.50 = $107.50.

So even if the stock rises from $100 to $106, you were “right” on direction, but the move may not be enough to cover the premium you paid by expiry. 

This is why options reward being right on direction and timing, not just direction.

Why do investors use options?

Some of the reasons options trading has grown in popularity include the ability to hedge against risk, a significant number of strategies to position based on the market movements, as well as the potential to enhance the yield of a portfolio.

#1 - Hedge against risk

Using options to hedge our existing investment holdings is also commonly used by options traders.

Put options, for example, are commonly used as a hedging instrument for investors to reduce their exposure to risk in the event that a stock in their portfolio decreases in value.

#2 - Flexibility of options strategies to choose from

There are many different options strategies available and users have the flexibility to either: (i) buy a call option (ii) sell a call option (iii) buy a put option (iv) sell a put option.

This opens up many possibilities to potentially make a profit if you are able to correctly anticipate where the market is headed.

#3 – Potentially enhance yield of portfolios

Investors may also generate income from their portfolios by participating in the buying and/or selling of options contracts.

One method is to sell covered calls on stocks that you already own, or covered puts on stocks that you have the cash to purchase.

What are the risks of options trading?

As with all investments, options trading comes with its own set of risks that every options trader should be aware of.

As derivative instruments, options come with complex risks associated with the underlying security risk as well as the limited time frame.

Options contracts have expiration dates–unlike stocks–which means you must be right about the direction and timing of the underlying security’s movement.

If you’re wrong or time runs out, you could lose your investment.

Furthermore, strategies such as short puts and short calls are also risky as they come with limited upside but unlimited downside.

In other words, options are highly leveraged products, and should only be looked at if you have sufficient knowledge about its potential risks. 

Step-by-step guide to trade options 

Next, we will demonstrate how you can trade options in Singapore with a step-by-step guide.

#1 - Choosing an option

As with buying stocks, first you must choose your option.

One popular approach amongst option traders is to choose options of stocks with higher volatility. This is because these traders may take the view that greater the price movements of a stock, the higher the likelihood that these large moves will result in an in-the-money option.

After entering the option chain, you can select a contract to view the details across the Call and Put tabs.

This shows you many different figures for various indicators or metrics that will be important for your options strategy.

This would include metrics such as the intrinsic value and time value. You would also get acquainted with the Greeks - Delta, Gamma, Theta and Vega. 

At this point, you will be presented with three options: buy, sell, or close. In this illustrative example, we will demonstrate using a purchase of a call option. 

After you have purchased the call option, you can then adopt a few different strategies including:

• Sell and close before its expiration date
• Hold until expiration

#2 - Close before expiration date

The first way to execute an open position is to close the position before its expiration date.

Let’s say Nvidia’s share price is US$220 on 1 November 2025. If you expect the price to go up, you may choose to buy a Nvidia call option with a strike price of US$250 and expiration date on 30 January 2026.

If Nvidia’s share price rises to US$260 on 1 January 2026, you may choose to close the ahead of the expiration date.

#3 Exercise at expiry

Another way to execute an open position is to hold the option all the way till its expiry date.

Let’s say that Nvidia’s share price does indeed rise to US$270 by 31 January 2026, you can then choose to exercise the option and buy Nvidia shares at US$250.

As each option typically represents 100 shares, this means that you will need to deposit US$25,000 to meet account margin requirements.

The above example is for illustration purposes only, and excludes any fees that may be incurred. 

Beginner-friendly options trading strategies

These are commonly-used starter strategies because they are easier to reason about and can be structured with clearer risk.

What would Beansprout do?

Options can be a useful add-on for investors who already understand equities, but only when you have a clear reason for them. 

We would mainly use options for three purposes: (1) hedging a position we already own, (2) generating income on stocks we are happy to hold long term, or (3) taking a defined-risk view on a stock without committing the full share capital upfront. 

If the goal is long-term compounding with minimal monitoring, we would still keep a core portfolio in diversified stocks or ETFs, and treat options as a smaller “satellite” tool.

You can read on how stocks and options differ and which may be better for your portfolio here.

If we are new to options, we would start simple and small. We would paper trade first or size down until we are comfortable with how option prices move with time decay and implied volatility, not just the share price. 

We would also avoid using money we might need soon, because options expire and may potentially go to zero even when we are directionally “almost right”.

Here is the practical approach we would follow:

• Start with simple strategies like covered calls (only on shares we already own) or cash-secured puts (only if we are genuinely happy to buy the shares if assigned).
• Pick liquid stocks or ETFs with tighter bid-ask spreads, so we are not overpaying just to enter and exit the trade.
• Remember the 100-share contract multiplier. One option contract usually represents 100 shares, so the position can be bigger than it looks.
• Plan for assignment upfront. If we sell options, we assume we might be asked to buy or sell shares, and we make sure we have the cash or shares ready.
• Avoid very short-dated options at the beginning, because options can lose value quickly as expiry gets closer.
• Use limit orders instead of market orders, so we have more control over the price we pay.
• Decide how we will exit before we enter, such as taking profit, cutting loss, or closing the trade before expiry.

When choosing a platform for trading options, we will focus on those with transparent and competitive fees, a clear options chain, and useful risk information like IV and the Greeks.

Many platforms like Webull, Moomoo, Longbridge and Tiger Brokers have made it easier for investors to take their first steps into options, with transparent fees, access to multiple markets, and dedicated educational resources.

If you are comparing options brokers, you can discover the best options trading platforms in Singapore here where we compare the features, fees, and tools.

Options can be a complementary strategy to stock investing for investors who want to expand their toolkit. 

However, trading options can carry a high level of risk and may not be suitable for all investors.

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