Capital market and derivative market are an organic whole. With the strengthening of communication and interaction with the world, China enterprises are suffering from huge fluctuations in raw material prices, and the production cycle is facing realistic price management problems. At present, there are 28 kinds of commodities listed in the domestic futures market, which provide investors with a risk management tool in the time dimension of production cycle, but at the same time there is still a management gap in the price dimension, and option products can just make up for its shortcomings. The introduction of options is helpful to establish a three-dimensional comprehensive price management system of China's real economy.
Matters needing attention in the initial stage of option trading
After more than 20 years of development, futures have been understood by many investors and applied to production practice, but for most market participants, options are still a new concept. The fundamental difference between futures and options lies in rights and obligations: futures are the unity of rights and obligations, while options are the separation of rights and obligations. Buyers only have rights but no obligations, while sellers do the opposite. For example, if an investor buys a hand option and the price is favorable to the option holder when it expires, then the holder can apply for exercise. On the other hand, if the price is unprofitable, you can choose not to implement it.
Option trading needs to pay attention to the following three aspects: first, you need to pay royalties to get options; Second, options have time value; Thirdly, volatility is an important factor affecting the option price.
If you don't consider the handling fee, futures can almost be said to be a transaction without cost. But options are different: in order to gain power, option holders need to pay a certain price, that is, royalties. Because the exercise price and expiration time of the purchased options are different, investors have different possibilities to obtain income. No matter whether investors buy real options or virtual options, they need some extra expenses, that is, time value. With the passage of time, the time value is also shrinking, but it is worth noting that the impairment of time value is not a straight line, that is, the impairment ratio of first-hand options is not linear. Generally speaking, the time value of first-hand options declines much faster in the last few weeks than in the previous weeks. The damage rate is generally related to the square root of the remaining time. Knowing this feature of options clearly, it is not difficult to understand that investors buy options and the price moves in the direction of previous judgment, but in the end it is still a loss.
In addition to time, there is also the fluctuation of subject matter. The greater the volatility of the subject matter, the higher the option price. The logic of this relationship is that if the subject matter has the price ability to move relatively far, then the buyer of the call option is willing to pay a higher price for the call option, and the seller will also demand a higher price. Greater volatility will bring more profit opportunities to option holders.
The main factors affecting the option price are target price, contract price, time and volatility. Of course, the interaction between the four is more complicated. For example, the rise of the subject matter price will push the call option price up, but at the same time, the time loss may push it in the opposite direction. Even if the price of the subject matter rises, the buyer of the call option may face losses because time erodes the value of the option.
The risk-free interest rate level and the underlying dividend distribution (the dividend distribution of a single stock and the comprehensive dividend income level of a basket of stocks that constitute the index) are two secondary factors that affect the option price. Market participants have different selection criteria for risk-free interest rates, some use the 90-day national debt interest rate, some use the lending rate, or have the fixed deposit interest rate with a certain term. But no matter which interest rate is chosen as a reference, higher interest rate means higher royalties, and lower interest rate means lower royalties. The dividend yield is very important to the seller of the option: if the subject matter does not have the problem of paying dividends, then the price of the call option is determined by the subject matter price, contract pricing and other factors. However, dividends tend to reduce the premium of call options. The higher the dividend, the lower the price of the call option. If you participate in the trading of stock index options and stock option products in different markets, it is very important in the actual operation process. The dividend ratio and dividend time in different markets will affect the option price. Take stock options as an example. At present, it is 1 month, and the stock price is $20. According to the convention, the stock will receive a dividend of 1 USD every February. During the ex-dividend period, the share will be reduced by $65,438 +0. Because the stock has not changed except this 65,438+0, and it happens that the stock is not a highly volatile type, it cannot be restored to $20 quickly after ex-dividend. Then, the buyer of the call option will not pay a high price, because ex-dividend will lead to the depreciation of the underlying stock price, and the holder of the call option will not get a cash dividend. In practice, the buyer of options tends to exclude the dividend factor when purchasing options. Due to the continuous impact of the financial crisis, the profitability and willingness to pay dividends of European and American enterprises have declined, and the option price has also been affected to some extent. This enlightens us that the overall dividend ratio of China's capital market is low at present, but if the corresponding stock options and index options products are introduced, the dividend level of the capital market will change greatly, which will directly affect the option pricing.
Different participants in the options market
1. Speculator
Speculators use financial instruments to bet on the future trend of the market, and they are more concerned about whether they can control more assets with less cost. The target of stock index option contract is a stock index composed of a basket of stocks, and a call option is equivalent to buying a basket of stock combinations. Because of the leverage of options, investors can control this group of assets in a small proportion until the expiration date of options. Because trading under certain leverage, trading positions are very sensitive to the price fluctuation of the underlying index, and investors can get a greater return on investment.
The leverage ratio of options is relatively high. Take 10 times lever as an example. 10 investment can be profitable if it can be profitable twice. However, investors need to pay special attention to the allocation of funds. For example, after making a profit, you can't put all the profitable funds into the market at once. Strategically, it is advisable to gradually establish option positions with small funds, which can maintain stable returns in theory.
2. Wall-sitter
Spot holders can use option contracts to reduce the risks that may be brought by future market changes. From the perspective of avoiding market risks, futures avoid directional risks and options avoid volatility risks. Generally speaking, investors hold assets for two purposes: pursuing returns and avoiding risks. There are two problems in using futures to preserve the value of spot: first, the effect will be obvious only when it is judged that there is a unilateral market; Second, the profit margin is locked. If the oscillation period is long in the process of market formation, it is easy to have the risk of short positions. Even with the guidance of stop-loss strategy, intraday trading will be inevitable, leading to an increase in transaction costs. Funds using stock index futures can reduce the fluctuation of returns when holding shares (assets). Participants who sell stock index futures largely give up the possibility of further profits in the upward direction and eliminate possible losses in the downward direction. Compared with futures hedging, the advantages of options are more obvious. Investors who use options can lock in one party's position. But if things get better, there is still room for profit. For example, fund managers can buy put options to hedge their downside risks, but if the stock market goes up, it will keep room for upside profits. By formulating trading strategies and adjusting the asset portfolio appropriately according to the changes of transactions, the transaction cost can be minimized. In order to prevent the risk of further decline in the portfolio, managers can also choose to sell call options to achieve the purpose of maintaining value. The diversity of hedging strategies provides a broad space for the application of options.
3. Pensions and other institutions that need to be paid regularly.
Endowment insurance institutions have the obligation to pay regularly, and the market profit of 1%-2% is not their main concern. The focus of such institutions is to ensure that there is enough cash flow every month (cycle) to meet the necessary expenses for a long time, and stable profitability is a more important consideration. The futures market cannot guarantee this demand, but the options market can. When deciding to buy options, institutions can know the possible maximum profit and the possible maximum loss.
4. Broker
The introduction of options is conducive to cultivating and expanding the team of brokers in China. According to the relevant data of the United States in recent years, the trading volume of stock options only traded on the exchange is increasing at the rate of 24% every year, and the average daily trading volume is about 6,543,805 lots, which brings a lot of commission income to brokers. The introduction of options will put forward more professional requirements for futures companies in pricing and trading strategies. Futures companies need to give customers more professional guidance on the combination of spot, futures and options, and combine investment consulting business to cultivate a group of employees and institutions that can adapt to international financial rules and promote the development and growth of the capital market.