Call the author
Subscription option means that the buyer of the option has the right to buy an agreed number of relevant futures contracts from the seller of the option at a pre-agreed price, that is, the exercise price, within the validity period of the option contract, but has no obligation to buy. If the option buyer doesn't want to buy futures, he just needs to let the contract expire.
Call option holders can also resell call options if someone wants to buy them. Therefore, call option is an option for the buyer. If the market is favorable to him, he can choose to implement it, otherwise he can give up. However, for the seller who has received the premium, he is obliged to sell the relevant futures contract at the execution price stipulated by option contracts at the request of the option buyer within the validity period stipulated by the option. Therefore, because the buyer pays royalties to the seller, the call option is an option for the buyer, but it is an obligation for the seller.
Put option
Put option, also known as put option, put option, seller option, put option, extension option or knock-out option, means that the buyer of the option has the right to sell a certain number of the subject matter at the exercise price within the validity period of the option contract or the exercise date.
The difference between the two
1. Put option is a put option, which means that the subject matter will fall into the contract. If the market price of the underlying asset falls below the agreed price of the option in the future, the buyer of the put option can sell the underlying asset at the exercise price and make a profit. If the market price of the future underlying asset rises above the agreed price of the option, the buyer of the option may give up this right. A call option is a call option, which means that the subject matter in the contract will rise. If the stock price on the expiration date is higher than the exercise price, then the call option is a real option, and the holder will exercise and get the income. If the stock price on the expiration date is lower than the exercise price, then the call option is in virtual value and the holder will not exercise it. At this point, the value of the call option is 0.
2. The biggest loss of the buyer who subscribes for the option is the royalty, and its profit is unlimited with the continuous rise of the positive share price; The seller's biggest profit is commission, and with the increase of the positive share price, its loss is infinite. The biggest loss of the put option buyer is the premium, and with the continuous decline of the positive share price, its profit is infinite; The seller's biggest profit is commission, and with the continuous decline of the positive share price, its loss is infinite. From: Optional sauce.
Call put option trading mode
Call option trading method:
Buy call option: investors buy call option contracts, pay royalties (option fees), and get the right to buy the underlying assets at a specific price in the future. This strategy is suitable for investors to expect the underlying asset price to rise.
Selling call options: investors sell call options contracts and collect royalties, but at the same time undertake the obligation to sell the underlying assets at a specific price in the future. This strategy is suitable for investors who believe that the underlying asset price will not rise sharply, or investors who are willing to get additional income on the basis of option fees.
Exercise call options: Investors holding call options can choose to exercise their rights when the options expire and purchase the underlying assets at a specific price. Exercise usually requires payment of execution fee.
The trading mode of put options:
Buy put option: investors buy put option contracts, pay royalties and get the right to sell the underlying assets at a specific price in the future. This strategy is suitable for investors to expect the underlying asset price to fall.
Selling put options: investors sell put options contracts and collect royalties, but at the same time undertake the obligation to buy the underlying assets at a specific price in the future. This strategy is suitable for investors who believe that the underlying asset price will not drop sharply, or who are willing to get additional income on the basis of option fees.
Exercise put option: investors holding put options can choose to exercise when the option expires and sell the underlying assets at a specific price. Exercise may also require payment of execution fees.