Mooer Stories Behind 10 Star Product Features: Options Trading

Moomoo's product manager Shine kicked off his investing journey five years ago. He believes the market is forever changing and a mature investor should be adaptable and resilient to change.

"In the past year, we saw a nosedive of the market as the external environment deteriorated drastically. In 2021, fast-growing companies and emerging industries were highly sought after, while in 2022, investors are more interested in companies with ample cash flow and stable operation performance." he recalled. "They use tools to assist with decision making more frequently, as they were getting more cautious and pickier."

The other important trend he observed in 2022 was the popularity of options⑴ trading. In a bear market, options trading was highly demanded by investors including Shine to diversify their investments.

Shine shared an experience of trading options to hedge the potential risk of stock price plummet. After a series of thorough and careful research, he was about to purchase shares of a technology, media and telecom (TMT) company in 2022. But he then found himself in a dilemma, as the company's share price hit a new record high at that moment.

"Finding the correct enter point is the key element to success, because nobody wants to buy high and sell low," he said.

"But investors need to fully understand that the market changes rapidly and is almost unpredictable, and it is common that the share price drops after you buy. As a value investor, I do not mind holding certain stocks for a long time. However, if I buy a put② simultaneously with the transaction, I can offset part of my unrealized principal loss caused by the following price drop because the put theoretically should gain in value if I decide to sell to close the position."

Garit joined moomoo’s parent company Futu in 2014, one year after the company officially launched. As a seasoned product manager, Garit understands the frontier market and has experienced the development and changing of investing trends.

Comparing the investing trends of 2022 to 2021, Garit said it is more difficult for retail investors to earn money in the stock market, due to inflation concerns, macroeconomic downturns and other factors that exacerbate the market volatility.

"Options trading may provide an alternative for certain investors to help alleviate the impact of the bear market," he said.

Apart from the original options trading feature, moomoo recently launched the multi-leg options trading feature on mobile end-user devices in the US market to empower investors with more advanced trading ability. With this feature, investors can combine two or more options transactions, or "legs" in trading strategies, which allows them to simultaneously buy and/or sell the legs aimed to achieve a certain investment goal.

"For example, a common multi-leg option order—called a long straddle—is comprised of buying both a put option and a call at the same strike price and expiration date. Investors hope to profit from large price movements with a long straddle, rather than suffer from the volatility," Garit said. "Once you fully understand the concept of options, learning to use multi-leg options trading should not be too difficult."