Options are divided into two basic types: call options and put options. Call option gives the holder the right to buy assets at a specific price on or before a specific date, while put option gives the holder the right to sell assets at a specific price on or before a specific date.
Option pricing models, such as Black-Scholes model and binary tree model, are usually used to calculate option prices. These models comprehensively consider various factors of option contracts, such as the underlying asset price, exercise price, maturity time, market volatility and so on. To calculate the theoretical price of the option. However, in actual trading, the option price will also be affected by other factors, such as market sentiment and liquidity. Therefore, the actual option price may deviate from the theoretical price.
When trading options, investors need to pay attention to the price, expiration time, exercise price and other factors, and make choices according to their own investment strategies and risk tolerance. At the same time, option trading usually involves high leverage and high risk, so investors should trade under the condition of fully understanding the risks in the option market.