When the underlying asset price is expected to rise, and the rising space may not be very large, put option strategy is used.
Selling put options at a certain exercise price can earn royalties. If the asset price of the subject matter is higher than the exercise price, when the sold option becomes an equal option or a virtual option on the expiration date, the buyer fails to perform, and the seller can get all the royalties, so the maximum income of the seller's investors is fixed. As long as the intrinsic value of the option on the expiration date (the exercise price of the option-the price of the underlying asset) is lower than the premium when selling the option, the seller can make a profit.
If the price of the subject matter is lower than the exercise price, the buyer will demand performance, and the option seller can only buy the subject matter at the exercise price, which will bring losses to the option seller. If the option seller chooses to close the position, the option premium will rise with the decline of the subject matter price, and closing the position will also bring losses. When the subject matter price due is equal to the execution price-royalty, this point is the breakeven point. The breakeven point is "strike price-option premium". That is, in this case, the total profit and loss of option trading is zero.
If the price of the subject matter is lower than the break-even point at maturity, option trading will bring net losses. The possible risks are enormous. The greater the price of the subject matter is lower than the execution price, the greater the loss. Therefore, it is necessary to be cautious when using put option short strategy alone. There is also an upper limit on the net loss of selling put options. When the subject matter price is 0, the maximum loss occurs = option premium-exercise price.
Example: An investor sells 65,438+0 put options with an exercise price of 65,438+000 and receives a premium of 2 from the buyer.
Maturity profit and loss analysis
Related assets
The basic assets are 90 92 94 96 9810010210410610810.
Sell a put option with an exercise price of 100.
Comprehensive analysis table of profit and loss put options
-8 -6 -4 -2 0 2 2 2 2 2 2
Application status of put option.
1. See if the market outlook has gone up or bottomed out. If you believe that the market is bullish, you can sell put options to collect royalties. If you are sure that the bottom of the market will rise, you can sell real put options and make the most profit. Otherwise, you can only sell flat or hypothetical put options.
2. Reduce the market conditions of market fluctuation
3. High implied volatility is more suitable for stock options: the expected interest rate falls; Expected dividend increase
Maximum income
Closing Revenue = Royalty Sales Price-Buying Closing Price.
Waiver of option income: royalties received (that is, the market price of the option subject matter is equal to or higher than the exercise price).
danger
Risk of lightening positions: selling price of royalties-buying price of lightening positions.
The risk that the option is required to be executed: the closing price of the target-the exercise price+the premium.
Breakeven point? Execution Price-Royalty
The closer the time value is to the expiration date and the price is near the execution price, the greater the seller's income.
Margin payment
The performance site? There are many heads
Trading strategy
Selling put options is a trading strategy that investors are not bearish on the market outlook, but are mostly bullish. Therefore, it is best to choose the time to sell put options when investors predict that the target price will rise slightly or think it is impossible to reach the breakeven point. For example, on September 1 day, an investor sold 1000 lots of CF511p14000 and got a 270 yuan/ton royalty. The break-even point of put options sold at this time is 14000-270 = 1370.
Scene 1: Best case scenario-the theme has really gone up. If the futures price on the maturity date is above the breakeven point, it is profitable. The biggest profit point is that the futures price exceeds the execution price.
After selling put options, futures prices soared, and investors were both happy and worried. The good news is that once the futures price exceeds the breakeven point, you can earn all the royalties. What is worrying is that even if it rises sharply, the biggest increase is only as much as royalties. For example, even if the futures price of the above call option remains above 14000, the maximum return is only 270×1000 = 270,000 yuan.
Scenario 2: the second best situation-the theme rises slowly. As long as the futures price is in the top pressure zone by the maturity date, there should basically be a small profit (the commission will shrink). However, if investors choose to close their positions, the gains will be small. If investors don't want to close their positions prematurely and want to improve their returns, they can: (1) sell call options with higher exercise price. (2) Sell call options with the same strike price.
Scenario 3: the worst state-the theme does not rise but falls. If you are in a slow decline, in order to avoid the infinite expansion of losses, unless you close your position, you should take a cautious approach to hedge. Choose to close the position, the condition should be that investors think that the short-term decline is slow and the intention of shorting the main force has been clearly seen. On the other hand, if investors think that the decline is only a flash in the pan, it will still rise to the maturity date, and at this time, they can cooperate with buying put options or futures short orders.
Because selling put options is a risky strategy, according to the normal situation, a stop-loss point should be set under the breakeven point, and once it falls sharply, it can stop. Here are five trading strategies.
1 move futures prices rose sharply, and buying call options increased profits.
The second measure is that futures prices rise slowly, and call options with different strike prices are sold to improve returns.
The third measure is that the futures price rises slowly, and the income is increased by selling call options with the same strike price.
The fourth measure is to slow down the futures price and use put options to hedge.
The fifth measure is to sell futures to hedge against the decline in futures prices.