Step 1: Select the option contract.
50ETF option contracts include call options and put options, and each contract has a different exercise price and expiration date. Under normal circumstances, the average contract of the main month is selected, and the liquidity of the contract in this month is relatively high, and the trend is relatively easy to grasp. There are two main factors to consider when choosing: first, it is necessary to predict to what extent the underlying asset price may rise and fall; Second, it is necessary to determine how much leverage to trade.
The second step is to open the warehouse for confirmation.
The selected 50ETF option contract can be confirmed, and the order can be placed through the option account opened in the securities company or option platform to determine the transaction quantity and price. You can choose a market order (at the current market price) or a limit order (at the specified price).
The third step is to observe the market trend.
After placing an order successfully, you can monitor the price changes of options through trading platforms or market software. The price of options will change with the market fluctuation and the passage of time, and it is necessary to decide whether to close or adjust the position according to the current market situation.
Step 4: Exercise the right or close the position.
This step means the end of the transaction. If you hold a call option and the price of 50ETF is higher than the exercise price, you can choose to exercise to buy the underlying assets of 50ETF. If you hold a put option and the price of 50ETF is lower than the exercise price, you can choose to exercise to sell the underlying assets of 50ETF.
In addition, you can also close the position before the option expires, that is, buy or sell the option contract at the current market price, and you can directly choose to close the position on the premise of profit.
The above are the trading steps of 50ETF options from selecting contracts to opening positions. If investors are not familiar with option operation, they can try option simulation trading first. After all, it is only a virtual capital transaction and will not involve real losses.
How to understand the meaning of 50ETF options?
50ETF option refers to the option contract with the above 50ETF as the underlying asset. SSE 50ETF is a trading open index fund based on SSE 50 Index, and its performance is highly correlated with SSE 50 Index.
50ETF option allows investors to buy or sell the equity of SSE 50ETF at a specific price (exercise price) on a specific date in the future. The holder of 50ETF options can choose whether to exercise on the expiration date to obtain the corresponding rights. 50ETF call options can be divided into call options and call options. Call option gives the holder the right to buy 50ETF, while call option gives the holder the right to sell 50ETF.
The 50ETF option can provide investors with a strategy to buy the SSE 50ETF up or down, so as to gain profits from the rise or fall of the underlying asset price. At the same time, 50ETF futures options also provide investors with tools to deal with shocks and risk management, thus protecting their portfolios when the market fluctuates.
50 trading methods of 50ETF options
Individual investors can choose to open a stock option account in a securities company with a stock account, provided that the capital verification threshold is 500,000 and they take the grade examination.
If you don't have the conditions for capital verification, you can choose an option sub-account to open an account and trade 50ETF options on the market through the institutional sub-account. From: Optional sauce.
Common trading strategies of 50ETF options;
1. Covered buying strategy: This is a conservative strategy, suitable for investors holding 50ETF. Investors can hold 50ETF shares at the same time and sell the corresponding call option contracts. By selling call options, investors can get royalties, which can partially offset the losses caused by the stock price decline. However, this also limits the rising potential of investors in the stock within the validity period of the option contract.
2. bullish strategy: this is a bullish strategy, suitable for investors who expect the price of 50ETF to rise. Investors can buy call option contracts and buy 50ETF at a fixed exercise price in the future. If the price increase of 50ETF exceeds the exercise price, investors can exercise and profit from it. If the price of 50ETF falls or remains unchanged, investors will only lose the royalties paid when purchasing options.
3. Short strategy: This is a bearish strategy, which is suitable for investors who expect the price of 50ETF to fall or remain stable. Investors can sell call option contracts and get a premium, but at the same time they also bear the risk of being exercised. If the price of 50ETF falls or remains unchanged, the option will lose its value, and investors can keep the royalties as profits. However, if the price of 50ETF rises above the exercise price, investors may need to sell 50ETF shares at the exercise price agreed in the contract, which may lead to losses.
4. bearish strategy: this is a bearish strategy, suitable for investors who expect the price of 50ETF to fall. Investors can buy put option contracts and sell 50ETF at a fixed exercise price in the future. If the price of 50ETF drops more than the exercise price, investors can exercise and profit from it. If the price of 50ETF rises or remains unchanged, investors will only lose the royalties paid when purchasing options.