Currently, while most investors trade with options, options can also be traded for both the long term and the medium to long term. Options can be bought up and down, and the meaning of short and long options contracts is simply as follows: buying up is called long options, and buying down is called short optionsHow to go long and short in options trading?
OneWhat does short vs. long in options trading mean?
Short options and long options are commonly used concepts in options trading, and they are related to the ** and sell of options contracts. The following are the specific answers to short and long options:
1.Long options: Long options refer to the rights purchased by option holders, who want to use the option contract to profit from future changes. When purchasing an option contract, the option holder pays a premium (premium) and acquires the right to buy or sell the underlying asset at a specified exercise ** (strike price) prior to the specified expiration date of the option contract. The buyer of a long option expects a favorable change in the future**, so the option buyer can receive a potentially unlimited gain, but the maximum loss is limited to the premium paid.
2. Short option: Short option refers to the right of the option holder, who makes this choice in the hope of obtaining the option premium, which can be regarded as a transaction that collects the premium. In the case of an option contract, the option holder receives a premium and assumes the obligation to exercise or sell the underlying asset on the option exercise date. If the ** movement of the underlying asset is unfavorable, then the loss of the option seller may be unlimited because the option seller must trade at the strike price, even if it is not against them.
In general, a long option is a holder of an option who buys an option contract to make a potential profit on a future movement; Short options are the first to be the best of the options, they are the first to contract the option to get the premium, but at the same time bear the potential unlimited risk of loss. In options trading, investors can choose whether to become a long option holder or a short option holder based on their market view and risk appetite.
2. How to do long and short options trading?
Options can be bought up and down, to put it simply: buying up is called long options, and buying down is called short. Long option means that a contract will be in the future and therefore belongs to the buyer.
For example, if you think that the cotton will be in the next three months, you can choose cotton options after three months.
Short options are investors and investors who believe that although the current stock price is high, they are bearish on the prospect and expect the stock price to be, so they sell and sell at the right time. This type of trading in which you sell first and then buy to earn the difference is called short.
Both long and short options are investments. Long, refers to optimistic about the future development of assets, and expects the stock price assets to rise in the future, so at low prices**, earn spread income. A-shares are a long market.
Options long refers to the buyer, short refers to the seller; Holding a short spot position means being a seller in the cash market, and holding a long spot position means being a buyer in the cash market; Option short means to be a seller in the ** market, and long option means to be a buyer in the options market.
3. What are the skills of long and short options trading?
1.Buy operation of long option.
The most important thing about investing in 50 ETF options is judgment: when you judge that the option will be in the market**, you can buy a long option. For example, if the market continues to be determined by you, then your profits will continue to increase and there is no limit because the profits of 50 ETF options are unlimited. Until the expiration date of the option, if the market**, your maximum loss is the premium you paid, and the loss is limited.
2.Long option sell operation.
If an investor thinks the market won't, they can have three types of long options. When it can only be determined that it will fall, it is possible to have a priceless option. When you are very sure that the market will either stagnate or not, sell the option. When there is a suspicion that the market is stagnant, the option is **. This type of investment approach is very risky and can only be adopted by focusing on the market,3A short option buy operation.
When investors think the market is bearish, they should buy short options because this strategy allows the gains made to increase with the market and the losses are limited to the insurance premiums paid.
4.Sell short option.
Like other markets, there are purchases in the options market. Some are sold, some are long, and some are short. When investors believe that the market **will not**, they resort to the strategy of short-selling options. You can have three different options based on three different scenarios: If you can only be sure that the market will be, then there is no price. If you are very sure that the market will stagnate or **, you can ** options. If you're still not sure if the market is stagnant, ** the option.
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