1.？ Options are more convenient for risk management.
Options can provide functions like "insurance". Options and futures are commonly used risk management tools, but their rights and obligations are different. For futures, rights and obligations are inseparable. No matter the buyer or seller of futures, no matter how the current futures market price changes, those who hold the contract due will bear the obligation of due delivery and performance. On the other hand, options are different. The buyer obtains rights (but not obligations) by paying royalties, and can obtain the underlying assets from the option seller or sell them to the option seller at the agreed price at any trading day before the expiration date (European option) or the expiration date (American option), that is, the seller is required to execute the contract; When the seller receives the royalties, he is obliged to execute the contract according to the requirements of the buyer. To some extent, it can be understood according to the formulation that "buying options is similar to buying insurance, and the equity fee is equivalent to insurance premium".
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2.？ Options can effectively measure and manage the risk of market fluctuation.
Financial investment usually faces two kinds of risks: one is the risk of absolute decline in asset prices (usually called "directional risk"), and the other is the risk brought by large fluctuations in asset prices (usually called "volatility risk"). When asset prices fluctuate greatly, it will lead to heavy losses for investors. For institutional investors, it is extremely important to manage not only directional risks, but also volatility risks to keep the value of the portfolio stable. The income adjusted by fluctuation risk has become the most important standard to measure the effect of asset management, and it is more and more important to control fluctuation risk.
3.？ Option is a more flexible basic component to promote market innovation.
Different maturity dates, different exercise prices, different call or put option variables and their leverage can be combined in many ways, including the combination of the same basic assets, and different strategies can be created to meet the needs of different trading and investment purposes, making options more important than futures as financial derivatives and a basic part of creating financial product buildings. It is flexible and can stimulate a large number of market innovations and trigger a series of market chain innovations of exchanges and financial institutions. Therefore, options are widely used in the innovation of various new products and become the basic elements of various structured products.