Abstract This research is to develop a new compound cage system that not only has the benefit of the traditional cage system but also has a series of oyster containers hanged on the circumference of the floating collar to add economic value to the cage aquaculture industry. The purpose of this study is to investigate the cage net deformation rate and the maximum mooring tension at the anchor under three types of Liuchiu sea states. The results of numerical simulation could be used as valuable guide for fish farmers and aquacultural cage designers. The developed numerical method is based on a lumped-mass approach to build a system of motion equations, and then utilizes the fourth order Runge-Kutta method to solve the motion equations. The numerical results reveal that under regular wave conditions, the cage net deformation rate for the compound cage system is slightly less than that of the traditional cage system, but the maximum mooring tension has reversed effect, i.e., the compound cage system has higher mooring tension than that of traditional one. As for the cases of irregular waves, the numerical results indicate that the cage net deformed so seriously that the fish can¡¦t survived at the sea condition of typhoon 50-year return period. To overcome this net shrinkage problem, an improved scheme is necessary to be implemented before a real compound cage system is installed in the open sea.