The risks of ChiNext options are the same as those of other options, and ChiNext options refer to options contracts with ChiNext indices as the underlying asset. ChiNext options are traded in a similar way and have features similar to other** or index options, but the underlying is the ChiNext index.
1. Basic types of option risk
Individual investors should pay attention to the following common risks when participating in options trading, including volatility risk, market liquidity risk, exercise and settlement risk, contract expiration risk, forced liquidation risk, and operational risk caused by human error or computer system failure.
1.Risks faced by both buyers and sellers of options are:
*Volatility risk.
Options are leveraged and more complex financial derivatives, which are affected by many factors, and sometimes fluctuate significantly, which may cause the option buyer to lose all the premium or the option seller to face a large loss.
Investors should understand how to manage their positions and effectively control their risk exposure.
Market liquidity risk.
Option contracts are divided into call and put, with different expiration months and strike prices, and there are a large number of contracts.
Some contracts have low trading volume and inactive trading. If investors choose contracts with poor liquidity, they may not be able to execute in a timely manner.
Therefore, investors should pay attention to liquidity risks when trading options and try to choose actively traded contracts.
Exercise settlement risk.
Exercise settlement risk refers to the risk of exercise failure and settlement default that investors may face.
After the option right holder proposes to exercise, if there is no sufficient amount of funds or **, it will be judged as a failure to exercise the option and cannot exercise the rights granted by the option contract, so the investor needs to prepare funds and securities for the contract to be exercised in advance.
If the option obligor fails to prepare sufficient funds on the settlement date or ** for settlement and performance, it will be judged to be in default and may face penalties such as fines, so investors need to be fully aware of and prepared for the risk of default and its consequences.
Operational risk. Operational risk refers to the risk caused by human error or computer system failure when investors are trading options.
For example, investors may choose the wrong trade type, trading target or trading unit when operating, and suffer unexpected losses. Computer system failures may also cause investors to be unable to close positions or exercise their options in a timely manner, resulting in unnecessary losses. It is recommended that investors familiarize themselves with the rules of options trading, operate cautiously, and choose an appropriate operating system to avoid losses caused by operational or system errors when trading and exercising.
Option Sauce Finishing Posted.
2.Options buyers need to be particularly aware of the following risks:
Contract expiration risk.
Generally, ** and ETFs do not have an expiration date, and investors can hold them for a long time, and there is no "expiration and invalidation" problem. Unlike ** and ETFs, options have an expiration date.
Once the expiration date has passed, the option will be forfeited. Even options contracts that are favorable to investors will no longer have any value, and the option buyer may lose all the premium paid and the potential gains.
Therefore, investors need to pay attention to the expiration date of each option contract and prepare for closing or exercising the option in advance.
3.Options sellers need to be particularly aware of the following risks:
Liquidation risk.
Forced liquidation risk refers to the risk that the customer will be forced to close the position due to insufficient margin or illegal position overrun.
Options trading adopts a similar ** day-free settlement system, after the market closes every day, the maintenance margin will be calculated and charged to the option obligor according to the contract settlement price, if the available funds in the obligor margin account are insufficient, it may be required to pay margin, if the margin is not made up within the specified time and the position is not closed by itself, it may be forced to close the position.
In addition, when an investor's illegal position exceeds the limit, he may also be forced to close his position if he fails to close his position in accordance with the regulations.
2. Methods for improving risk control capabilities
When dealing with risks, we must be prepared and know what the risks areIt is also necessary to have high skills and know how to improve risk management and control capabilities.
Options are more complex financial derivatives, which makes the risk management of options more important. To put it simply, investors can improve their options risk control capabilities from the following three aspects:
1.Define your risk tolerance
When investing in options, investors should understand their own risk tolerance, avoid taking excessive risks, and choose a trading strategy according to their own situation. For example, the option seller may need to continuously replenish the margin as the market changes, so the option seller should consider its own financial strength when opening a position to avoid being forced to close the position due to insufficient margin.
2.Participate in options demo trading
Investors can participate in the real simulated trading of options, accumulate experience in trading operations, deepen their understanding of risks, and be familiar with the specific trading operation process, so as to avoid losses caused by operational errors in real trading.
3.Learn Xi risk control knowledge
As a derivative, the influence mechanism of options is more complex, and there are more risks to be paid attention to. Investors should continue to learn Xi relevant knowledge, including carefully understanding relevant business rules and reading options investment books, etc., to further enhance their risk control awareness and capabilities.