Home of SSE Options.Options and **, both types of products have leverage, but the leverage attributes are different. For **, the contract leverage is fixed, and both the buyer and the seller need to pay a margin;For options,Leverage originates from the product design itself, the leverage ratio of each contract is not fixed, and the leverage size will change with the change of the underlying asset** and contract premiumThe option buyer pays the premium to enjoy the rights granted by the contract, and the option seller pays a margin to ensure that the contract expires to fulfill its obligations.
The leverage ratio of each option contract is not fixed, so how should the leverage ratio of an option be calculated?
By definition, the leverage ratio of an option contract is equal to the ratio of the percentage change in the option** to the percentage change in the underlying asset**, i.e.:
We can simplify the calculation of option leverage with the help of the Greek letter delta (which measures the effect of the change in the underlying on the change in the option), i.e.:
Investors can query the corresponding leverage ratio of each contract in the options trading software, and for option contracts with the same expiration time and different exercises**, the leverage ratio of "in-the-money options is small, and the leverage ratio of out-of-the-money options is large". Leveraged trading is like a double-edged sword, the right use can achieve the effect of "small to big", improper use will suffer the risk of loss magnification. Therefore, investors need to choose options contracts with moderate leverage ratio according to their own risk tolerance to trade.
An example: Let's say the current SSE 50 ETF** is 3000 yuan, and the exercise price is 3 after 1 monthA call option of 200** is 01000 yuan, delta is equal to 0333。
The current leverage ratio for this option contract is (3.).000÷0.1000)×0.333 = 10 times. If 50ETF***1%, the option will follow**10%.