ETF options refer to the right and contract to buy or sell open-ended index funds at a specific price at a specific time in the future. In the global exchange-listed derivatives market, the non-ETF options that have developed the most rapidly since the new century are none other than ETF options. In ETF options trading, the option contract is a standardized contract: in addition to the price of the option being formed through public bidding in the market , the other terms of the contract are all stipulated in advance, so today we will learn about option contracts: What are the types of option contracts?

1. What are the types of option contracts?

1. According to the trading direction specified in the option contract, options can be divided into call options (Call) and put options (Put). Put options are bearish and believe that the underlying asset It will fall within the contract, while the call option is bullish, believing that the underlying asset will rise within the contract.

2. Divided according to the time when the option buyer can exercise: European options and American options. European options can only be exercised on the expiration date, while American options can be exercised before expiration. exercise on any day.

3. According to the relationship between the exercise price of the option contract and the underlying price: real-value options, at-the-money options, and out-of-the-money options. The intrinsic value refers to what the option buyer can obtain when he exercises the option immediately. The income depends on the difference between the exercise price of the option and the price of the underlying asset. If the intrinsic value is greater than zero, it is called a real-valued option. If the intrinsic value is equal to zero, it can be an at-the-money option or an out-of-the-money option. To put it more simply, if calculated according to the level of option fees, the option premium of real-valued options is higher than that of at-the-money options, and the premium of at-the-money options is higher than that of out-of-the-money options.

2. How to choose an option contract better?

After selecting the contract month for call or put, the next thing to determine is: whether to be a buyer or a seller, and whether to buy or sell a call option or a put option. If it is bullish, you can choose to buy a call contract; if it is bearish, you can choose to buy a put contract; if you are not bearish, you can choose to sell a call contract; if you are not bearish, you can choose to sell a put contract.

Source Baidu: Caishun Options~

It is best for investors to participate in more actively traded contracts, because the bid-ask price spread in the market of inactive options contracts is large, and it is sometimes difficult to complete a transaction. Difficulty, even if the transaction is completed, it will be difficult to close the position due to insufficient liquidity. In 50ETF options trading, under normal circumstances, everyone will choose contracts with high trading volume. Because options contracts with high trading volume have better liquidity.