What should I do when the option expires?Do you continue to hold or close your position in time?This question bothers many investors. In this article, I will ** this question, however, no matter what operation you choose, you need to be cautious and do a good job of risk control!Option expirationThe above material ** in: Caishun Options
What should I do when the option expires?Generally speaking, there are three ways to deal with options after expiration, which are exercise, waiver of exercise and liquidationLet's **!1. What does option exercise mean?
Exercise is a process in which the buyer decides whether to actually exercise the option on or before the expiration date of the option according to the provisions of the contract, and carries out the purchase and sale transaction with the agreed **. Judging the timing of exercise is very crucial, and investors should decide whether to exercise the option based on the market environment, the underlying asset** and their personal judgment of the market.
Note: If you can get a greater profit after exercising, or if you need to avoid losses, then option exercise is also an option.
2. What does it mean to give up the exercise of an option?
Option waiver exercise?In fact, it is also a non-exercise, and the option does not exercise the right to choose not to exercise the option on the expiration date. In this case, the option will lapse and the holder will not receive any gain, and the seller will not be required to deliver or receive the underlying asset, and the option waiver is based on a rational judgment of the future market trend** and the current contract profit and loss situation.
3. What does option liquidation mean?
Option liquidation refers to the option that an investor chooses to settle or clear the contract in advance in the process of holding the option contract. Options can be closed and bought and sold at any time, which means that investors can choose to close the position before the option expires, sell the option contract, take profit or stop loss in time, and close the position only when the option is still valuable.
Is there a difference between closing an option and exercising?There is a difference, closing refers to closing the original position out of the market, and exercising refers to the delivery of the original position into physical or cash, so there are two ways to complete the settlement of the rights and obligations of both parties to the transaction after the option is exercised. Option liquidation and exercise both mean that the investor no longer holds the ownership of the option contract, but the liquidation will obtain the premium of the option, and the liquidation operation actually refers to the time when the investor needs to choose to sell when playing the option.
Finally, the above views are for reference only, not as a basis for trading, and profits and losses are at your own risk. The market is risky, and investors need to be cautious.