It should be said that the pricing of options is very complicated. When discussing this issue in 1973, the market actually has no answer. It was not until 1973 that the first option exchange was established that a tool was formally cited as a pricing model, called BS model, which was invented by two professors at the University of Chicago, Blake and Scholes. This model is so complicated that two professors won the Nobel Prize for it. From this point, we can understand that options are indeed the most complicated derivatives, because you have many valuation methods anyway, and you can't win the Nobel Prize for studying this method. This won the Nobel Prize, not only won the Nobel Prize, but also solved many problems. Many options traders, buyers, sellers, market makers, how to quote and price options, BS model can easily solve. Because its main pricing principle is volatility, its volatility refers to the future volatility. Here is a formula, you can go to any website to find the option pricing model. All factors are known, and only one factor is volatility. For example, you predict the future volatility of China Ping An to be 30%, and you predict its future annualized volatility to be plus or minus 30%.

After a year's fluctuation, investors feel that they can't consider it so far. If it fluctuates by 30% a year, how much will it fluctuate in a day? Let me tell you a simple formula. This volatility is derived from the annual volatility to the daily volatility. There is a relatively simple formula, which is the root relationship of 256 trading days. If you predict that the future target of a stock is 16%, predict that its daily fluctuation is this 6% divided by 16, plus or minus 1%. In other words, let's talk about the entire Shanghai and Shenzhen 300 or the entire Shanghai Composite Index. In the future, the daily fluctuation service will not exceed 1%, and its fluctuation rate will not exceed 16%, which is simple. When you enter the volatility, you can immediately know the price of the option. Then you have an abacus. When you customize OTC options, what price will brokers or futures companies quote you, such as 5%, 3%, or 10%? You can know it by typing it in, and you can also figure out how much your quotation fluctuates, and whether you bought it expensively or cheaply.