In options trading, there are two roles, the buyer and the seller, there is a buy order, there is a sell order, and there is a buy orderIt seems to the buyer that buying a call option equals being bullish, and buying a put option is equivalent to being short, and forIt seems that the seller is not looking for a call option or is not looking for a small down, and buying a put option is not for a short or a small upside
Therefore, the basis of trading is to identify the direction in which the position is opened, whether to be a buyer or a seller. Note that most options trades start with the buyer, which is simply bullish or bearish, and the transaction cost is also low. However, the professional knowledge required by the seller is relatively high, and at the same time, it is also necessary to pay a deposit, which is a certain high risk.
The essence of the difference between call options and put options lies in the different ways of disposing of the underlying asset, and the call option is the right to a certain *** subject matter in the future. This sentence means that if you ** a SSE 50 ETF call option contract, if you want to exercise it for physical goods at the expiration time, you can exchange it for a share of SSE 50 ETF** according to the exercise price, provided that the option contract you hold is valuable.
Of course, you can also directly choose [Sell to Close Position] to close the existing position to make a profit when the current option contract is profitable. Note that if the option contract expires without any value, it cannot be exercised, and the loss is the cost of the option contract at that time.
A put option, also known as a put option, is the right to sell the underlying asset in the future. The meaning of this sentence is that if you ** a SSE 50 ETF put option contract, if you want to exercise it for cash on the expiration date, you can sell it at the strike price, in fact, it is not necessary to sell according to the exercise steps, you can directly choose [sell to close the position] to close the existing position.
So for the buyer of a call option, the higher the ** of the underlying, the better. For the party buying the put option, the lower the underlying**, the better. The buyer's return is unlimited, and the greater the increase in the index tracked, the higher the profit, which is due to the benefit of the leverage effect that comes with the option.
And for the sellers of call and put options, the trend of the underlying is at its bestAt this time, the seller can collect the premium paid by the buyer as income, the seller's income is fixed, but the risk is huge, which is why the seller needs to pay a deposit.
As long as most investors understand the above basics, they can simply start an option trade.
Option sauce collated and released.
1. The basic trading strategy of call options
1.*Call Option: *Must exercise ** x call option, after paying a premium, enjoy the right to buy the underlying by execution** before the expiration date. The buyer has the right to choose whether to exercise the option when the option expires, which is a kind of right contract.
2.Sell Call Option: Selling a call option is an obligatory contract. If the buyer of the option chooses to exercise the option while the contract is still valuable, the seller cannot refuse to exercise the option, but needs to ** the underlying asset as agreed in the contract.
The expiration value and profit or loss of the call option
Expiration Value: The expiration value of a call option is the difference between the underlying asset minus the exercise, i.e. the underlying asset is exercised.
P&L: The P&L of a call option is the amount remaining after the expiration value minus the premium (i.e., option**).
Analysis of the influencing factors of the maturity value
1.All other things being equal, the expiration value of the call option increases as the underlying asset** rises.
2.All other things being equal, the higher the exercise**, the lower the expiration value of the call option.
Second, the basic trading strategy of put options
1.*Put option: A put option that must be executed**, and after paying a premium, it has the right to sell the underlying asset on the expiration date. The buyer has the right to choose whether to exercise the option when the option expires, which is a kind of right contract.
2.Selling a Put Option: Selling a put option is an obligatory contract. If the buyer of the option chooses to exercise the option while the contract is still valuable, the seller cannot refuse to exercise the option, but needs to purchase the underlying asset in accordance with the contract.
The expiration value and profit or loss of the put option
Expiration Value: The expiration value of a put option is the difference between the strike and the underlying asset, i.e., the strike of the underlying asset.
P&L: The P&L of a put option is the amount remaining after the expiration value minus the option premium.
Analysis of the influencing factors of the maturity value
1.All other things being equal, the expiration value of the put option increases as the underlying asset** decreases.
2.All other things being equal, the higher the exercise**, the higher the expiration value of the put.
In summary, the buyer of a call option is indeed expecting the underlying asset, so if the market moves in line with their expectations, the buyer will make a profit. Conversely, the seller who sells the call option will face a loss when the market** is in the market. For put options, the opposite is true, where the buyer expects the underlying asset*** to make a profit, while the seller wants the market** to make a profit by collecting the option premium. This simple and intuitive formulation helps beginners understand the fundamentals of options trading. Options