💡 Options are complex, high-risk products. They can cause you to lose all the money you invest (the premium) quickly and, in some strategies, additional amounts due to the collateral committed. They are not suitable for all investors.
An option is a contract that gives you the right —not the obligation— to buy or sell 100 shares of the underlying asset at a fixed price (strike) before an expiration date. To acquire that right, you pay a premium.
Options use leverage: with less capital you can get exposure to more shares. Leverage amplifies both potential gains and losses, and you can lose 100% of the premium in a short time.
Available strategies at Hapi
Hapi enables only 4 strategies; naked positions are not allowed:
Strategy | Type | View | Maximum loss | Level |
Covered Call | Sell a Call | Neutral to bullish | Value of the committed shares minus the premium received (can be significant if the share price falls sharply) | Level 1 |
Long Call | Buy a Call | Bullish | The premium paid | Level 2 |
Long Put | Buy a Put | Bearish | The premium paid | Level 2 |
Cash-Secured Put | Sell a Put | Neutral to bearish | Strike minus premium (committed collateral) | Level 2 |
In each strategy, the maximum loss is limited to the amount indicated (premium paid and/or collateral). "Limited loss" does not mean "no risk": you can lose that entire amount.
Examples
The examples with Tesla, Apple, Amazon, and Microsoft are hypothetical and illustrative only. They are not recommendations, do not reflect real results, and do not include fees or taxes. Hapi Securities is self-directed and does not make recommendations.
Operational restrictions
Limit and stop-limit orders only (no market orders).
Not available for crypto or 24/5 sessions.
Validity GFD or GTC (maximum 90 days).
Fees
Check the current options fees in the app/web. Regulatory fees apply on sales, including the TAF of $0.002 per contract on options sales and the SEC fee on sales, charged through Apex Clearing Corporation.
At expiration
OTM (out of the money): expires worthless; you lose the premium.
ITM (in the money): Hapi will attempt to close the position at 3:00 p.m. ET on the expiration day. If it can't be closed, the option is exercised automatically at market close.
Requirements and enablement
To trade options you must complete the enablement process. Hapi evaluates your experience, objectives, financial situation, and risk tolerance. Level approval depends on that evaluation and may be denied. Covered Call requires Level 1; the others require Level 2.
Required documentation
Before trading options you must receive and review the "Characteristics and Risks of Standardized Options" (ODD) and the Options Agreement.
Glossary
Term | Meaning |
Premium | Price the buyer pays for the contract; the maximum they can lose. |
Strike | Agreed price at which the share is bought/sold if exercised. |
Breakeven | Price the share must reach to neither gain nor lose. |
Call / Put | Right to buy (Call) / sell (Put) 100 shares at the strike. |
ITM / OTM | With / without intrinsic value. |
Buy to open | Buy to open a long position. |
Sell to close | Sell to close a long position. |
Sell to open | Sell to open a short position. |
Buy to close | Buy to close a short position. |
Exercise / Assignment | Execute the contract / be obligated to fulfill it. |
Collateral | Cash locked as a guarantee (Cash-Secured Put). |
Greeks | Risk indicators: Delta, Gamma, Theta, Vega, Rho. |
Risks
Options involve market risk, high volatility, illiquidity, and expiration risk. Assignment can occur at any time before expiration. You can lose the entire premium paid.
Options, stocks, and ETFs are offered by Hapi Securities LLC, member of FINRA and SIPC (CRD #311868); custody and clearing via Apex Clearing Corporation. SIPC protects certain securities in the event of the broker-dealer's insolvency; it does not protect against market losses and does not cover crypto. More information at www.sipc.org. Hapi Securities is self-directed and does not make investment recommendations.