The premise of trading options is to fully understand the object of trading, that is, the option contract. According to the trading rules of options issued by the Exchange, an option contract refers to a standardized contract formulated by the Exchange, which stipulates that the buyer has the right to buy or sell the agreed subject matter at a specific price at a certain time in the future.
In this definition, it needs to be clear that the option stipulates the rights of the party who buys the option. This right means that the subject matter can be bought and sold at a pre-agreed price in the future, and the pre-agreed price is the exercise price. The option to buy the subject matter in the future is a call option, and the option to sell the subject matter in the future is a put option. Some people buy options, others sell options. After the option buyer exercises his rights, selling a call option requires selling the subject matter, and selling a put option requires buying the subject matter.
In addition, according to the different exercise time, it can be divided into European options and American options. The buyer of European options can only exercise on the expiration date, while the buyer of American options can exercise at any trading time on or before the expiration date. At present, the metal options listed on Shanghai Futures Exchange-copper, aluminum, zinc and gold options are all American options (note that they are modified contracts).
According to call options, put options and different exercise prices, all options contracts corresponding to a futures contract can be listed, which are generally T-shaped quotations in trading software, as shown in the above figure, which is the option disk corresponding to the futures contract of Shanghai Copper 220/KLOC-0. According to the relationship between the exercise price and the underlying futures price, options can be divided into three categories: real options, equal options and imaginary options.
How to judge whether an option is real, imaginary and flat? A direct and effective method is to exercise the option immediately. After being converted into future positions, the futures will float, so the option is a real option, the futures will float, the option is a virtual option, and the futures will float to zero, which is a flat option.
For example, in the option contract of CU220 1C75000 in the figure, if you exercise immediately and hold multiple positions of CU220 1 bought by 75000, the latest market price is 70590, then the floating loss is 44 10, and CU220 1C75000 is a virtual option. Similarly, CU220 1P65000 is an imaginary option, while CU220 1C66000 and CU220 1P74000 are real options.
The above is a static comparison. In actual transactions, the market is constantly changing, and the degree of truth is also changing, which is not absolute. From the price point of view, real option > flat option > imaginary option means that the cost of buying options is different, and the income of selling options is also different. In addition, there are other indicators that will have different performances, which are all places that need to be paid attention to when trading options.
Trading options for profit is ultimately reflected in the fluctuation of option prices. If you buy an option, the price of the option will go up, and if you fall, you will lose money. If you sell an option, it will be vice versa. In other words, if you want to profit from options trading, you must first find out what factors affect the price change of options and how, then analyze these factors and finally decide whether to buy options or sell options.
According to option pricing theory, option price is determined by target price, exercise price, volatility, maturity time and interest rate, among which the most important ones are target price, volatility and maturity time. Their influence on the option price is as follows: the change of the underlying futures price is directly proportional to the change of the call option price and inversely proportional to the change of the put option price; The change of volatility is proportional to the change of option price; With the maturity gradually shortened, the option price gradually decreased.
Therefore, if it is judged that futures prices are rising and volatility is rising, it is best to buy call options; If the futures price falls and the volatility drops, it is best to sell call options. The market is dynamic, and so are prices and fluctuations, so it is necessary to comprehensively judge the influence of these factors.
If the trading logic of option strategy has a path to follow, we should first judge the direction of benchmark futures price, whether it is up, down or fluctuating, whether it is up, down or limited, and screen out available options accordingly. Then, referring to the volatility and the length of the term, choose the appropriate contract month and exercise price. After the admission is confirmed, don't forget the risk control of the position. We must be clear about the risk points of the selected strategy, think about countermeasures, and adjust in time when the market changes, so as to be prepared.
Specific to the option strategy, options themselves are divided into call options and put options, plus two-way operation, the basic strategies include buying call options, selling call options, buying put options and selling put options. These four strategies are combined, and there are also strategies such as diffusion and jumping.
From the perspective of trading purposes, option strategies can be divided into directional strategies, volatility strategies and hedging strategies. Directional strategy, as its name implies, is suitable for different futures trends. Fluctuation strategy is a special option trading. For example, the contract of CU220 1 has been in a volatile market since the end of 10, and futures are not easy to operate. However, the volatility strategy of using options, that is, the wide selling strategy, is still profitable.
The reason is that when selling call options and put options, the impact of the underlying price changes on the option price is roughly offset, but the decline in volatility and the shortening of maturity time make the option price fall, so it will be profitable to sell the wide-span portfolio.
The hedging strategy is to buy options for protection on the basis of the existing future positions, offset futures losses with option profits when the direction is unfavorable, or sell options to increase commission. The actual transaction process can be selected according to the fund situation and profit and loss target camera.