Investment experts are using: Advanced Guide to Portfolio Options, helping you navigate the market flexibly, with lower deposits and more stable conditions!
Google's chain has been in the spotlight these past two days, with Google and Broadcom seeing crazy gains recently!
Is Google's chain really about to surpass Nvidia's chain? Will Google take over Nvidia's position as the world's most valuable company?
Can TPU's ability to train large AI models and handle real-time chat compete with Nvidia's Blackwell?
Can the TPU chips Google sold to Anthropic help Anthropic excel in training Claude?
Broadcom's earnings report is on December 11—let’s all look forward to it!!!
While closely monitoring options, Options King has been listening to the voices of investors in the community!
Options King has heard investors' dissatisfaction with Longbridge's options strategy consuming too much margin, including:
- Excessive margin requirements for single-leg short options
- Premiums from short options being frozen and unusable
- Combination strategies with short options occupying margin for naked short legs
- ......
Options King secretly vowed to optimize combo options to fulfill everyone's wishes as soon as possible! So, he threw himself into the task of optimizing strategies to make trading smoother......
Now, Options King has emerged from seclusion! And he brings an updated margin strategy for combo options! Now, all investors can enjoy a more "cost-saving" margin calculation method!!! When trading strategies involving short options, you'll be pleasantly surprised to find that the required margin is lower than before! The savings can be used to open more positions or try more diversified asset allocations.
1. Starting now! Significantly reduced liquidity requirements for shorting options!
Options King first thought of investors with "rental income" needs! Now you can trade more short options for "rental income" at the same time!
Margin calculations for short options will be flexibly reduced, and the margin obtained from shorting options will be immediately available! Now, only deep in-the-money expiring options near the exercise date will see a slight increase in margin (to prevent exercise by buyers).
If Options King is not bearish on Google in the long term and sells a GOOGL Put, he previously faced the problem of short option margin exceeding maximum loss, requiring his account to have high liquidity to execute the trade.
After improving the margin calculation method, Options King's account only needs minimal liquidity to complete this trade. At the same time, the premium from shorting the option will directly enter his account and be counted as margin.
Additionally, the previous restriction that only allowed buying options for highly volatile small-cap stocks has been resolved! Now, when investors spot a stock they like—such as your "next Palantir" or "the Nvidia of ** industry"—you can not only use Leap Calls for value investing but also engage in short option trading!
2. What if you already hold the underlying stock? Use Covered Calls to lower your cost basis!
Options King also thought of investors who recently needed "protective calls." When the market isn't rising too quickly, protective calls can reduce the cost of buying the underlying stock while limiting losses in a downturn.For example, Nvidia and AMD recently are perfect for using protective calls to reduce the cost of buying the underlying. If the stock falls, the premium from the call can hedge some of the losses!
With the updated Covered Call strategy, the total margin required to open the position will be lower than the margin needed to buy the underlying stock outright! This is because the margin from selling a Call can offset the cost of buying the underlying!
If Options King wants to establish a position in Google in the short term and expects Google not to rise significantly during this period, he can sell a Call and buy 100 shares of GOOGL. This strategy allows for a mildly bullish view on GOOGL.
- If GOOGL falls, the average cost of the position is lower due to the sold Call, resulting in smaller losses compared to buying the stock outright.
- If GOOGL rises moderately, the lower average cost means higher gains than buying the stock alone!
- If GOOGL surges sharply, don’t worry! You’ll still have decent gains, though they’ll be capped by the sold Call.
Options King uses protective calls to establish his stock holdings. The opening cost of this strategy is lower than the margin requirement for buying the stock outright, allowing him to buy GOOGL with slightly less capital and lower his cost basis! This approach is especially effective for stocks not expected to surge in the short term!
3. Vertical spreads—reduce costs and increase efficiency!
Now, when opening vertical spreads, only the maximum loss amount is locked as margin!
This means if Options King crafts a vertical spread with a max profit of $200 and a max loss of $100, this spread will only require $100 in margin! Now you can make directional bets on multiple underlyings simultaneously!
Moreover, the max profit and loss of these strategies can be adjusted by tweaking the strike prices to fit your preferred risk-reward profile!
To help everyone better understand the four types of vertical spreads, Options King has prepared a table:
| Spread Name | Purpose | Mnemonic |
| Bull Call Spread | Bullish | Buy low, sell high |
| Bear Call Spread | Bearish | Buy high, sell low |
| Bull Put Spread | Bullish | Buy low, sell high |
| Bear Put Spread | Bearish | Buy high, sell low |
Many long options lose time value as expiration approaches. But spreads converge toward their intrinsic value near expiration, so spreads are better for short-term directional bets, not long-term investments!If you open a weekly spread, consider closing it early on Wednesday or Thursday! This avoids potential volatility reducing your profits on Friday.
4. Use straddles and strangles to collect premium or bet on events
Options King has noticed many underlyings experiencing extreme volatility lately—even after earnings, they swing wildly due to "semiconductor hype" or "AI hype." Take AMD's rollercoaster moves or Novo Nordisk's (NVO) failed transformation... This reflects high market uncertainty and unstable conditions:
If a stock is expected to trade within a reasonable range, selling straddles or strangles can be highly effective. The best-case scenario is the stock settling exactly at the strike price (K), where both legs expire worthless, allowing you to pocket both premiums.
If a major event could cause significant volatility—but you're unsure whether it'll spike up or down—buying straddles or strangles makes sense.
| Strategy | Purpose | Max Loss |
| Short Straddle | Low future volatility (Ideal: max premium) | Large if volatility spikes |
| Short Strangle | Low future volatility (Ideal: less premium) | Large if volatility spikes |
| Long Straddle | High future volatility | Loss of both ATM premiums (Higher cost) |
| Long Strangle | High future volatility | Loss of both OTM premiums (Lower cost) |
5. Summary
Combo options offer higher win rates and greater flexibility than single-leg strategies! Options King has worked hard to optimize the combo options experience! We hope you'll experiment with these strategies based on market conditions!
The updated combo margin rules have been rolled out to all investors. If you encounter any issues, please report them to Options King—we'll resolve them ASAP! For any questions, feel free to leave a comment.
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