Option, like futures, is a contract. After paying a certain price to the seller, the option buyer has the right to buy or sell assets at a fixed price on or before a certain date. It is to give you the right to obtain equity at a certain price in a certain period of time in the future.

An option contract is a contract that enables the buyer to acquire the right to buy or sell the corresponding assets at a certain price on or before a certain date.

On the other hand, the seller, the other party to the option contract, is obliged to sell or buy the corresponding assets when the buyer decides to exercise his rights. The buyer will pay a certain fee for this option contracts, which is called royalty. And the seller will charge this fee.

For example, if there is a house, the current market price is 1 10,000. You expect the house price to increase in the next 1 month. Now I don't want to take so much money to take so many risks, and I don't want to miss this income.

At this time, you can sign a contract with the real estate agent, stipulating that after one month, you have the right to buy this house at the current price 1 10,000 regardless of whether the house price is rising or falling. To this end, you signed a contract with the real estate agent and paid 5000 yuan to the real estate agent.

The above contract is called option contracts, and the agreed price is 654.38+00,000 yuan, which is the exercise price, and the deposit of 5,000 yuan is called royalty, which is the contract price.

Source: Option Circle

Options can be divided into the following types.

1. According to the rights of the option buyer, it can be divided into call option and put option:

Call option refers to an option contract in which the option buyer has the right to buy a certain number of underlying securities from the option seller at the agreed time and price. Put option refers to an option contract in which the option buyer has the right to sell a certain number of underlying securities to the option seller at the agreed time and price, and the buyer has the right to sell the option.

Call options and put options are mainly divided into four trading directions.

Option buyer (limited risk, maximum loss premium): call buy, put buy; Option seller (the theoretical risk is infinite, and the maximum income is commission): bullish selling is bearish.

1. Call option: Also called call option, call option gives the buyer the right to buy an asset (mainly futures in this paper) at an agreed price in the future. In the future, if the futures price rises above the strike price, the option contract will become a real option and the buyer has the right to exercise this right; If the futures price falls and the option contract becomes a virtual option, the buyer has the right to give up this right, and the biggest loss is the royalty.

2. Put option: Also known as put option, put option gives the buyer the right to sell assets at an agreed price in the future. In the future, if the price of the underlying asset falls below the exercise price, the buyer has the right to exercise this right; If the price of the underlying asset rises in the future, the buyer has the right to give up this right, and the biggest loss is the royalties.

3. Selling call options: For the option seller, if the market outlook is bullish, when the price of the subject matter rises above the exercise price, the option buyer will exercise, and the buyer's profit is the loss of the option seller. The higher the price of the subject matter, the worse it is for the option seller. On the other hand, if the market outlook falls and the price of the subject matter is lower than the exercise price, the buyer of the call option will give up the exercise, and at this time, the seller will get the maximum income as the royalty.

4. Selling put options: For the seller of options, if the market outlook falls, when the price of the subject matter falls below the exercise price, the buyer of options will exercise, and accordingly, the seller of options will suffer losses, and the maximum loss = exercise price-futures price at the time of exercise-option premium. On the other hand, if the market outlook rises, the subject matter price is higher than the exercise price, and the put option buyer cannot exercise the right, then the put option seller will get the maximum income as a premium.

Second, according to the time limit for the option buyer to exercise the option, it can be divided into European option and American option:

European option refers to the option that the option buyer can only exercise on the expiration date of the option. At present, ETF options in Shanghai Stock Exchange are all European options. American option refers to the option that the option purchaser can exercise on any trading day between the option purchase date and the expiration date.

1. European option: the buyer of European option can only exercise it on the option expiration date. At present, domestic stock indexes and ETF options are European options. Listed European options include Shanghai and Shenzhen 300 stock index options, Shanghai 50ETF options, Shanghai 300ETF options and Shenzhen 300ETF options. Stock index options may be listed in the future, and the probability is European options.

2. American option: American option allows the buyer to exercise at any time before the option expires, so the buyer's right of American option is relatively large, and the seller's risk to American option is correspondingly large, so the price of American option is relatively high under the same conditions.

At present, all commodity options options in China are American options:

Previous issues: Shanghai gold, Shanghai copper, Shanghai aluminum, Shanghai zinc, rubber options, crude oil.

Big business office: soybean meal, corn, iron ore, liquefied petroleum gas, polypropylene, polyvinyl chloride, plastic L, palm oil options.

Zhengshang Institute: sugar, cotton, PTA, methanol, rapeseed meal, thermal coal options.

3. According to the relationship between the exercise price and the market price of the underlying securities, it can be divided into real option, flat option and imaginary option:

Real option refers to a call option whose exercise price is lower than the market price of the underlying securities, or a put option whose exercise price is higher than the market price of the underlying securities. Equal option, also known as equal option, refers to a call option whose exercise price is the same as or closest to the market price of the underlying securities. Virtual option refers to a call option whose exercise price is higher than the market price of the underlying securities or a put option whose exercise price is lower than the market price of the underlying securities.

A liquidation option refers to an option whose exercise price is equal to the price of the underlying futures contract.

Real option refers to the option that the exercise price of call option (put option) is lower (higher) than the underlying futures contract price.

Virtual option refers to the option that the exercise price of call option (put option) is higher (lower) than the underlying futures contract price.

Call option: hypothetical option: strike price > futures contract price, real option: strike price, target price, hypothetical option: strike price.