What Are the Main Risks of Short Options on Pluang?

The main risks of short options on Pluang are unlimited loss on short calls, large but capped loss on short puts, assignment risk, and a mandatory collateral requirement — and all four apply because Pluang's US Stock Options are American-style, meaning a buyer can exercise at any time before expiry, not only on the expiry date itself. Selling a Call Option obligates you to sell the underlying stock at the strike price if assigned; because the stock price can rise indefinitely, the loss on a short call has no ceiling. Selling a Put Option obligates you to buy the underlying stock at the strike price if assigned; this loss is capped, since a stock price cannot fall below zero, but it can still be substantial. Because assignment can happen on any trading day before expiry, sellers must hold at least 100 shares and/or cash as collateral per contract for the entire time the position stays open, not only in the days near expiry.

• Unlimited loss on short calls: Example: you sell a Call Option with a $100 strike price. If the stock rises to $150, you're obligated to sell at $100 — a $50 loss per share. Since the stock price can theoretically keep rising with no upper limit, the potential loss on a short call is unlimited.
• Large, capped loss on short puts: Example: you sell a Put Option with a $100 strike price. If the stock falls to $50, you're obligated to buy at $100 — a $50 loss per share. The maximum possible loss is reached only if the stock falls all the way to $0, capping the loss at $100 per share (the strike price).
• Assignment risk: Assignment happens when the buyer exercises the contract, obligating the seller to fulfil the terms of the option sold. Because Pluang's options are American-style, this can occur on any trading day before expiry — not only at expiry — so a short position carries assignment risk for as long as it stays open.
• Collateral requirement: Options sellers must provide at least 100 shares per contract and/or cash as collateral. If assignment occurs, this collateral is used to fulfil the resulting transaction obligation, which is why it must be held for the full duration of the position, not just near expiry.
• Regulatory context: US Stock Options on Pluang are offered through PT PG Berjangka, licensed by OJK as a Perantara Pedagang Derivatif Keuangan, with trades guaranteed via Jakarta Futures Exchange (JFX) and Kliring Berjangka Indonesia (KBI).

Related questions:

Q: Is the loss on selling a Call Option really unlimited?
Yes, theoretically. When you sell (short) a Call Option, you're obligated to deliver the underlying stock at the strike price if assigned. Because a stock's price has no theoretical ceiling, the gap between the strike price and the market price can keep growing, so the loss on a short call has no fixed maximum. This is why short calls are considered the highest-risk short options position, and why Pluang requires collateral before you can open one.

Q: What's the maximum loss on a short Put Option?
The maximum loss on a short Put Option is the strike price minus the premium received, multiplied by the number of shares per contract — reached only if the underlying stock falls all the way to $0. For example, selling a Put at a $100 strike caps the maximum loss at $100 per share, since a stock's price cannot go negative. This makes short puts risky but mathematically bounded, unlike short calls.

Q: Can my short option be assigned before expiry?
Yes. Pluang's US Stock Options are American-style, meaning the buyer can exercise the contract on any trading day before the expiry date, not only when it expires. As a seller, assume assignment can happen at any time your position is in the money, not just in the final days before expiry — plan collateral and risk management for the entire life of the trade.

Q: What happens to my collateral if my short option gets assigned?
Pluang uses the shares and/or cash you posted as collateral to fulfil your resulting obligation — delivering stock for an assigned short call, or paying for stock for an assigned short put. You're required to hold at least 100 shares and/or cash per contract for as long as the short position stays open, since assignment can occur without advance notice. Because of that, the collateral stays locked and cannot be used for other trades while the position is open.

Q: Do I need to actively manage a short options position?
Yes. Short options carry ongoing risk for as long as the position is open, since American-style assignment can occur on any trading day before expiry. Sellers typically monitor the underlying stock price relative to the strike price and are prepared to buy back (close) the position before losses grow or assignment becomes likely, rather than holding passively until expiry. Leaving a short position unattended is the main way sellers turn a small premium into a large loss.