Example: 65438+ 10/month 1, the strike price of copper futures is 1750 USD/ton, and A buys this right and pays 5 USD; Sell this right and get 5 dollars. In February 1, copper price fell to 1 695 USD/ton, and put option price rose to 55 USD. At this point, A can adopt two strategies:

Exercise 1: A can buy copper from the market at the middle price of 1.695 USD/ton, and sell it to B at the price of 1.750 USD/ton. B must accept it, and A will make a profit of 50 USD (1.750-1.699 USD).

Put option: A can sell a put option for $55. A profit of $50 (55-5).

If the copper futures price rises, A will give up this right and lose $5, while B will get $5.