Option time premium is an opportunity for option holders to earn and can be calculated through the market premium model, time value model, and expiration option value model. Options Trading Options Diary SSE 50 ETF Options
Premium Rate = (Option** Intrinsic Value) Intrinsic Value 100%.
Where an option** refers to the current trading of the option contract**, and the intrinsic value refers to the difference between the actual value of the option and the strike price. For example, if an option has a strike price of $100 and an intrinsic value of $50, but the actual trade** is $70, the premium is: (70 - 50) 50 100% = 40%.
This means that the option has a premium of 40%, indicating the additional fee that the investor is willing to pay to purchase the option. The higher the premium, the greater the risk of the option, but the higher the potential return.
The option premium rate is the ratio of the difference between the option** and the actual underlying asset in the option contract. It reflects the market's expected value or market sentiment for an options contract.
The size of the option premium can reflect market participants' expectations of the future trend of the underlying asset. When the option premium is high, it means that the market expects that the underlying asset** will have greater volatility or uncertainty, so the risk premium contained in the option contract is relatively high.
1. Changes in time value: time value refers to the value of the option itself, when the underlying asset changes, the time value of the option will change, and the higher the proportion of the time value of the option in the final value of the option, the more obvious the time premium of the option.
2. The impact of the expiration date: before the expiration of the option, the time value of the option will gradually decrease as the expiration date approaches, and the final ** of the option will gradually be lower than the ** of the option, and this difference is the time premium.
3. The impact of volatility: the higher the volatility, the higher the time value of the option, so the more obvious the time premium of the option.
4. The impact of option rights: Option rights refer to the rights of option holders who can exercise their rights on a selective basis, which is a potential financial asset, and when the rights are relatively strong, the time premium of options will be more obvious.
1. Have the best thinking and try not to resist orders, especially out-of-the-money contracts. 50ETF options are a "T 0" trading model that can be bought and sold during trading hours. However, it is not advisable to do it frequently, as it will incur high transaction costs.
2. When opening a position for the first time, first a small number of contracts, and then according to the changes in the target, gradually follow the increase in positions if you do it right, and reduce your position if you do it wrong.
3. Be cautious about buying options contracts that are about to expire, the closer to the expiration date, the more investors should pay attention, and a little carelessness may cause large losses.