What are the risks of option trading? 1. Market risk: the option price is affected by the relationship between market supply and demand. When the market price fluctuates greatly, the option price may fluctuate greatly, causing investors to face market risks.
2. Liquidity risk: As there are relatively few transactions in the options market, the market liquidity may be insufficient, and investors may encounter difficulties in buying and selling options, which may lead to trading risks. This article is from WeChat official account: understand the options.
3. Exercise risk: When exercising, investors need to know the exercise price and exercise time. If the exercise price is too high or the exercise time is too short, investors may lose money.
4. Credit risk: In option trading, if the counterparty defaults, investors may face losses.
How to prevent and control option risk? Forecast market price
In the option market, it is necessary to judge the market direction before continuing trading. The underlying market can reflect the general direction of the option market. Investors can directly judge the option market through the market of the option target. If the market of options goes up, the option subscription contract goes up and the put contract goes down. If the underlying market falls, the option put contract rises and the subscription contract falls.
Combination of buying and selling
Sellers unite with sellers, or buy and sell in the same direction to increase profits, or lock in large profits and losses through vertical price differences. More importantly, the profit-loss ratio of the seller's strategy will be relatively small, which can keep your principal to the greatest extent, so that you can cross the volatile market and come back when there is a big unilateral opportunity.
What is an authoritative warehouse? Option position limit refers to the maximum number that investors can hold for a single contract variety.
1. For investors who open new contract accounts, the right position limit is 20, and the total position limit is 50.
2. For investors whose contract accounts have been opened 1 month and the trading volume of option contracts has reached 100, the limit of their right positions is 1000.
3. The trading volume of option contracts reaches 500, the balance of self-owned assets entrusted by the securities company exceeds 1 10,000, and the right position limit is 2000.
4. Everyone can increase the limit of their purchase amount to no more than 30% of the balance of their own assets entrusted by customers in securities.
Option trading skills 1, understand the types of option trading.
Options can be divided into European options and American options. European options cannot be exercised in advance for a period of time before expiration, while American options can be exercised at any time before expiration. Investors need to understand the characteristics of the two options trading, consider their own investment risks and financial strength, and choose the options trading that suits them.
2. Set a reasonable stop loss.
In option trading, investors should set reasonable stop loss and take profit to prevent excessive investment losses caused by complex market factors and uncertainties. Take profit and stop loss is a very extensive investment strategy in the market at present, which can reduce investment risks and improve returns.