What Are Multi-Leg Options—and Why Are Traders On It?

When I first saw the term “multi-leg options”, my mind went to a three-legged race or a funky tap dance—certainly not trading. But in the world of options trading, having multiple “legs” can work to your advantage.

If you’ve traded options before, you might be familiar with single-leg options—placing a call or a put. But did you know you can combine multiple positions in 1 trade? That’s where multi-leg options come in.

We know the term sounds technical, but stick with us. By the end of this guide, you’ll understand what multi-leg options are, why they might be worth adding to your trading toolkit, and how even beginners can start.

 

What is a multi-leg option strategy?

A multi-leg option is when you buy or sell more than one option contract at the same time as part of a single order. Think of it like buying a set meal instead of ordering items individually (more cost-efficient) or combining moves in a video game (to do more damage).

Comparing single-leg vs multi-leg

Feature	Single-Leg Option	Multi-Leg Option
Number of contracts	One (e.g. a single call or put)	Two or more (e.g. one call + one put, or two calls at different strikes)
Approach	One directional bet (up or down)	A combination of positions for strategy and flexibility
Potential Returns	Potential for high returns or losses depending on market movement and position type	Returns are typically capped, with controlled and defined outcomes occurring within a specific price range
Potential Risks	Subject to market volatility, time decay and other factors	Subject to market volatility, time decay and other factors, and other risks such as execution risk and margin requirements.

A single-leg option can still be effective, especially if you’re confident about a stock’s direction. But with multi-leg strategies, you can tailor trades for lower cost, better control, and potentially higher rewards.

 

Have you thought about why some traders prefer multi-leg options?

These strategies can lower costs and increase flexibility, such as

• Hedging against sudden stock declines
• Generating income through premium-selling techniques
• Simulating complex market conditions

But the thing is, most brokerages don’t offer the option to pull off multi-leg options trades. You probably have to key in each trade separately, which means more effort and higher costs because you’re paying per leg. 

A brokerage in Singapore that supports multi-leg options is Tiger Brokers. You can execute multi-leg options in one go on a streamlined interface. Its built-in tools also show real-time Greeks (the metrics that affect an option’s pricing), the maximum profit/loss, breakeven points, and estimated margin.

 

Okay, but isn’t this just for pros?

It might sound like Greek (literally—Greeks are part of options pricing). But you don’t need to be a pro to start.

Platforms like Tiger Brokers offer tools that help both beginners and experienced investors make sense of their trades. For instance, the P&L curve tool shows how a strategy performs throughout the day and at expiration.

The Tiger app automatically calculates maximum profit, loss, breakeven points, and margin, making it easier to explore multi-leg options without feeling overwhelmed. Furthermore, Tiger Brokers charges some of the lowest commissions for options trading in Singapore—just US$0.35 per contract, with a platform fee of US$0.30 per contract.

 

Want to try options without risking real money?

Looking to understand how options trading works without risking real money, get started with a demo account. With limited virtual funds to practice buying and selling calls or puts at different strike prices and expiration dates,  the demo account is designed to help new users become familiar with the platform’s features, tools, chart analysis, and multi-legged options.

An example: Stock ABC —A multi-leg trade

Let’s say you believe Stock ABC’s share price will rise modestly over the next month. You’re not expecting a massive jump, but enough to make a profit. Instead of buying a single call option—which could be expensive—you decide to try a bull call spread, a simple two-leg strategy.

Here’s how it works:

1. First, you buy a call option with a strike price of $180. This gives you the right to buy Stock ABC shares at $180, no matter how high the price climbs. The premium for this option is $5.00 per share, and since one contract covers 100 shares, you pay $500.
2. Next, you sell another call option with a higher strike price of $190. This obligates you to sell Stock ABC shares at $190 if the buyer exercises the option. For taking on this obligation, you receive $2.50 per share, or $250 for the contract.

By selling the second call, you’ve reduced your net cost for entering the trade from $500 down to $250. That’s your maximum possible loss.

Now, let’s talk about outcomes:

• If Stock ABC stays below $180 at expiry, both options expire worthless. You lose the $250 you paid to enter the trade.
• If Stock ABC lands between $180 and $190, your bought call gains value, and your sold call limits your upside—but you still walk away with a profit.
  If Stock ABC shoots above $190, your gains are capped, but you’ve already locked in your maximum profit at that level.

The beauty of using Tiger Brokers here is that you don’t have to crunch all these numbers yourself. Their tools instantly calculate your max profit, max loss, breakeven point, and margin requirements before you even hit “confirm”.

 

Just so you know, trading options has risks too

Options trading can open the door to strategies for leverage, income, or risk management—often with less upfront capital than buying stocks. From covered calls to protective puts, there are many ways traders can use options to express market views or add flexibility to a portfolio.

However, options do come with trade-offs. They expire, which means timing matters. Complex strategies can unravel if even one part moves against you. It’s good to note that markets don’t always behave as expected.

That’s why understanding how options work is key. Start small, stay informed, and only use strategies that match your comfort level and goals.

 In short:

1. Before you dive in, understand the risk first
2. Know the rules before you dive in

 

The bottom line

Multi-leg options—whether it’s a simple bull call spread or more complex strategies—give traders more flexibility than single-leg trades. They can reduce upfront costs, cap potential losses, and open up ways to profit in different market scenarios. In this article, we looked at what they are, why traders use them, and how tools like Tiger Brokers’ real-time Greeks, P&L curves, and trying it out first on a demo account can help both beginners and experienced investors put them into practice.

Of course, no strategy is foolproof. Options trading carries risk, and you should always assess your financial situation, goals, and risk tolerance before diving in.

Feeling ready to explore? Download the Tiger Brokers app to start trading options today. You can also learn more about options trading here.

Tiger Brokers is currently running a campaign with SGX—enjoy no custody fees and 0 Commission* for SGX Listed Securities! SGX CDP custody fees for Tiger users are waived until further notice, no additional action required. For more information, visit: https://www.itiger.com/sg/marketing/SGXCustodyFeesWaived. 

*Terms and conditions apply 

 

This post was written in collaboration with Tiger Brokers. While we are financially compensated by them, we nonetheless strive to maintain our editorial integrity and review products with the same objective lens. We are committed to providing the best information in order for you to make personal financial decisions with confidence.

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About the author

Caleb Leong is passionate about travelling the world and getting involved in cross-cultural works. Freelance digital marketing and content writing is a way for him to express himself creatively while earning his keep. He unwinds by diving into a variety of music genres. Living in a digitally disrupted world, he’d like to offer a different perspective on finances to show people the possibilities of what goes beyond a typical “Singaporean life”.