Options are contracts between two parties regarding future buying and selling rights.

As far as individual stock options are concerned, the buyer of the option (the right party) obtains a right by paying a certain fee (premium) to the seller (the obligated party), that is, the right to exercise the right at the agreed time and at the agreed time. Buy or sell an agreed-upon amount of a specific stock or ETF to the option seller at a price.

Of course, the buyer (right party) can also choose to give up the exercise of rights. If the buyer decides to exercise its rights, the seller is obliged to cooperate.

The exercise price of a stock option refers to the transaction price stipulated in the option contract for buying or selling the subject matter of the contract when the option buyer exercises the option.

Option contracts refer to underlying assets such as exchange-traded open-end index funds that are formulated uniformly by the Shanghai Stock Exchange and stipulate that the buyer can buy or sell agreed stocks at a specific price at a specific time in the future or track a stock index. Standardized contracts for goods.

Option contract terms mainly include contract abbreviation, contract code, transaction code, contract subject matter, contract type, expiration month, contract unit, exercise price, exercise method, delivery method, etc.

Based on market needs, the Shanghai Stock Exchange may adjust the terms of option contracts.

Reference materials: "Shanghai Stock Exchange Pilot Trading Rules for Stock Options", Introduction to Shanghai Stock Exchange Stock Options