Since the end of 2014, A-shares have been bullish. Take the CSI 300 stock index as an example. Even with the recent correction, as of the close of trading on June 19, 2015, the CSI 300 stock index had increased by 118% compared with the same period last year. %, closing at 4637.05 points. For the current price, most investors believe that there is still considerable room for profit, but if they continue to hold it, given that they have accumulated considerable gains, they have also fallen into a correction in the short term, and the depth and time of the correction are unknown; if they choose to close their positions, It is safe to be safe, but it is very likely to lose the future rising market, putting investors in a dilemma.

Fortunately, with the successful listing of SSE 50 ETF options, using options to respond to the current market is a method worth trying. The strategy I recommend here is to naked sell out-of-the-money put options. This strategy involves selling out-of-the-money put options alone without any protective measures.

As can be seen from the above figure, as the price of Shanghai Composite 50 ETF rises, the position continues to make profits, and the maximum profit is the option premium. The price of the Shanghai Composite 50 ETF corresponding to the turning point on the profit and loss chart is exactly the execution price. What we sold was an out-of-the-money put option, and its execution price was lower than the current price of the Shanghai Composite 50ETF at the initial stage. Therefore, even if the 50ETF does not fluctuate, the position can still make a profit over time. This is mainly due to the use of the time of the option. Value decay characteristics, that is, as time goes by, options continue to depreciate in value. As long as the option remains out-of-the-money on the expiration date (the underlying price is higher than the exercise price), the investor can obtain the full premium; if the option is in-the-money ( The underlying price is lower than the execution price), which is also a good thing. While investors receive all the premiums, they can also obtain a corresponding number of 50 ETF shares through passive exercise of options, which satisfies investors' needs to purchase the underlying assets.

For example: Suppose an investor is optimistic about the stock market in the long term, but it is too dangerous to enter the market at the price of 2.8 yuan for the Shanghai Composite 50 ETF now. The investor believes that it is relatively safe to enter the market at the price of 2.5 yuan. He can sell one lot short at the price of 0.065 yuan. Expiring in September, the Shanghai Composite 50 ETF put option with an exercise price of 2.5 yuan will receive a premium of 650 yuan. If the price rises in the later period, although they do not enjoy the huge benefits brought by the increase, they can easily get 650 yuan in royalties; if the price falls in the later period, but does not fall below the execution price of 2.5 yuan, investors can still get 650 yuan in royalties; If the price falls below the execution price of 2.5 yuan, investors can still get a 650 yuan premium. At the same time, the option will be executed and converted into 10,000 SSE 50 ETFs on the expiration date, with a price of 2.5 yuan. Although investors may be in a floating loss situation, ideally, Owning shares of stock index ETFs at points is in line with investors' long-term optimism about the trend of the market.

In the context of the bull market, investors can continue to use this method to continuously obtain premiums. Even if there is a correction in the market, the options will be converted into ETF shares after exercise, and they can also enjoy the profits brought by the price increase in the later period. , wouldn’t it be the best of both worlds?

Buffett’s practice:

This method is simple and easy to use. The stock god Buffett applied this method on Coca-Cola stock as early as 1993. In April 1993, Buffett bought the stock with a right of US$1.5 Jin sold 5 million put options with an expiration date of December 17 of that year and an exercise price of $35. At that time, the market price of Coca-Cola was about $40. For Buffett, if the price of Coca-Cola was above US$35 on December 17, 1993, then the option would expire and be void, and Buffett could take the US$7.5 million (US$1.5 × 5 million shares) premium received previously in vain; but if When the stock price falls below $35, Buffett will have to buy 5 million shares of Coca-Cola at $35. Because he received an option premium of $1.5, Buffett will only truly lose money when Coca-Cola falls below $33.5.

For Buffett, there is already a desire to continue to increase his holdings of Coca-Cola. If Coca-Cola does not fall, then it is good to earn some option premium in vain; but if it falls sharply, then the option premium is equal to the market subsidy of $1.5 for you to buy Coca-Cola, which is also good. For a long-term investor, this becomes an investment method that is suitable for both ups and downs.

Finally, it must be reiterated that the prerequisite for applying this method is to be optimistic about the market outlook and willing to hold the underlying assets for a long time. Otherwise, if the underlying assets continue to fall, great risks will arise. 1. The rule of “small for big”. In the futures market, everything is possible only if you try to survive. If you invest all your financial resources into the market and operate with a full position, the result will be either success in one fell swoop or losing everything. But if you operate like this every time, sooner or later you will lose everything. The vitality of the futures market will also be short-lived. Therefore, survivability represents the comprehensive quality of a speculator, and its essence is the ability to control funds. There are two most attractive features of the futures market: one is the two-way opening of positions under T+0 conditions, which doubles the entry opportunities than the stock market; the other is that there is a 10 times leverage, which provides us with It creates a "small fight for big" love scene. Precisely because there is such a high-risk, high-yield game rule, we must strictly abide by it, especially the "small fight for big" rule. Therefore, the amount of money we invest must be very small, and we must be mentally prepared to lose all of it (this part of the money), and be sure that even if we lose all of it, it will not have much impact on our lives.

This is the first level. Only by firmly controlling your own funds can you seize the initiative and have the conditions to "take small to win big". In actual operation, timely transfer the money realized from profits to your bank account. This is the money you really earn, so that you will make the next transaction a hundred times more carefully.

2. "Safety first" rule. The safety mentioned here refers to the safety of funds, that is, the safety of entering the market every time an order is placed. Only decide to place an order when the benefits outweigh the risks (that is, you are 70-80% sure); if the trend is unclear and you are not sure about it, never place an order blindly, and never enter the market with a gambling mentality or intuition; If you find that the direction is wrong, you should stop the loss or lock the position in time to ensure the safety of funds.

3. The law of "go with the flow". Making money is the last word. On the premise of complying with the above two rules, how to ensure that every order is profitable? That is the law of going with the flow. If the short-term (1-2 days) trend is bullish, intraday operations must be long orders; if the short-term (3-5 days) trend is bullish, overnight orders must be long orders. Therefore, we must grasp the general trend, determine the direction of placing orders based on the direction of the trend, and operate with the trend. We must not go against the trend. This is an iron rule to strictly abide by. Only in this way can "the benefits outweigh the risks." Therefore, every speculator must develop a pair of sharp eyes, discern every detail, and identify trends in order to increase the chance of winning.