Basic elements of option trading in 2021_Advantages of fund splits
When trading stock options, it is usually achieved through an option trading contract between the buyer and the seller, and this A contract is a unified standard contract that spells out the necessary conditions for a transaction. The following are the basic elements of stock options trading that the editor has collected for you. You are welcome to refer to them.
Basic elements of option trading
1. Participants in option trading
Participants in option trading include option buyers, i.e. buyers, and option sellers Those are sellers, middlemen, brokers, etc.
2. The agreed price of the stock
The agreed price of the stock is also called the option exercise price, which refers to the settlement price when the option buyer exercises the option. If it is a call option, the agreed price of the stock in the option transaction should be slightly higher than the current market price; if it is a put option, the agreed price of the stock in the option transaction should be slightly lower than the current market price.
3. Option price
Option price is also called insurance premium. This is a certain amount of money that the option buyer pays to the seller, which is the price at which the option contract is purchased. The proportion is usually 5 to 30% of the agreed price. The amount of payment mainly depends on the following factors:
(1) The length of time specified in the option contract. The longer the time between the signing date and the due date of performance, the higher the insurance premium will be. Because the term is long, the risk for the option seller is greater, while the buyer has more opportunities and room for choice.
(2). The agreed price of the stock, also called the option exercise price. When the stock agreement price is closer to the stock market price, the insurance premium is higher, and conversely, the insurance premium is lower.
(3). The activity level of the stock indicated by the option. If the price of the stock fluctuates less in the stock market, or even does not change significantly for a long period of time, it means that the risk of the option seller is smaller, and the insurance premium is of course lower; on the contrary, if the market price of the stock fluctuates greatly, , the price is very active, then the risk of the option seller may increase, and the insurance premium will increase accordingly.
(4) Influence of supply and demand. If the number of buyers requesting to purchase options increases over a period of time, the insurance premium charged by the option seller will also increase; conversely, the insurance premium will decrease. In addition, some options trading buyers and sellers can transfer their options before expiration, so the impact of supply and demand will be more obvious.
4. Stock type and trading quantity
Each option contract stipulates a specific stock type and a certain quantity, usually 100 shares each.
5. Types of option contracts
The contract must specify whether it is a call option contract or a put option contract, or a two-way call and put option contract.
6. Validity date
The contract must indicate the expiration date of the option contract and specify the date on which it will expire. It stipulates that the option buyer must exercise it within this period, otherwise it will be considered abandoned or invalid. Generally, the validity period ranges from 3 months to 6 months to 9 months.
Advantages of fund splitting
Fund splitting can accurately adjust the net value of fund shares to 1 yuan, but it is difficult to accurately adjust the net value of fund shares to 1 yuan through large-scale dividend distribution .
In addition, in order to achieve the purpose of paying a large proportion of dividends, it is possible to forcibly sell some stocks and convert unrealized gains into realized gains in the short term, which will risk damaging the interests of investors and make investors Investment opportunities may be lost.
The split will not affect the fund’s realized income, unrealized gains, paid-in funds and other accounting items and their proportional relationships, and will have no substantial adverse impact on the rights and interests of investors.
The meaning of the tombstone line
The tombstone line is the K line for escaping, because it will become your burial place if it is too late! The tombstone line is when the stock price opens higher when the stock price is relatively high. , the stock price fell all the way, and finally closed down, forming a huge negative line on the K line, indicating that the main force fled. The sooner you leave, the easier it will be!
It is also jokingly called the "Monument to Human Heroes", and there are many hidden treasures buried under the monument. Countless "loyal souls", after such a K-line appears, it is common for many investors to be unaware that the decline has begun, and still hold the stocks tightly and stand guard until dark. In fact, if you know this iconic K-line, you will not be a loyal sentry on the top of the mountain easily.
Looking at the daily line, you can’t tell it’s a tombstone line, but you can see it clearly on the time-sharing line.
After a sharp surge, there was a similar trend of releasing huge amounts at a high level and closing the long negative line. Technically, the long negative line is called the "tombstone line."