In options trading, many partners do not understand the difference between the delivery date and the exercise date, and even cause losses. In today's issue, Sea Planet will give you a popularization of these two important dates.
First of all, the definition of the delivery date is different from the exercise date. The delivery date, as the name suggests, is the date on which the buyer and seller make the delivery. In the Chinese market, the delivery date is usually the fourth Thursday of each month. On this day, the buyer needs to prepare the funds, and the seller needs to prepare the corresponding ** or assets for delivery.
The exercise date is the date on which the option buyer can exercise the right. In the Chinese market, the exercise date is usually the fourth Wednesday of each month. On this day, the buyer can choose whether to exercise the option or not, and if the decision is made, the buyer and seller need to make delivery.
The difference between the two dates is the point in time. The delivery date is the day after the exercise date, that is, the buyer decides whether to exercise the option on the exercise date, and then performs the actual delivery operation on the delivery date.
To help everyone understand better, let's give an example. For example, if you are a buyer of an option, and you find that the market of the underlying asset is higher than the strike on the exercise date, then you can choose to exercise the option and then deliver the operation on the delivery date to earn the difference. Conversely, if the market is below strike, then you may choose not to exercise the option to avoid losses.
In conclusion, the delivery date and the exercise date are two important dates in options trading, and we need to understand their differences and implications. At the same time, it is also necessary to develop reasonable trading strategies and risk management measures to cope with possible market changes and uncertainties. Remember, the settlement date is the day after the exercise date!