Basic application of call option;

Earn spread income and gain greater leverage. Through the analysis of the price trend of the underlying assets, traders believe that the price of the underlying assets will continue to rise, or it is very likely to rise, and they can get the spread income by buying call options. Hold the underlying assets at a lower cost while locking in the biggest loss. Avoid the risk of rising prices of underlying assets. There are two basic situations to avoid the risk of rising prices of underlying assets by purchasing call options:

① Limit the risk of selling the underlying assets. Traders who hold a long position in an asset want to continue to enjoy the benefits of rising prices, but they are worried about falling prices, and they are worried about rising prices when selling assets. In this case, call options can be used to provide insurance for the assets held. The operation strategy is to sell the assets held and buy the call options of the assets at the same time, so as to limit the risk of price increase after selling the underlying assets.

(2) Lock in the cost of purchasing the underlying assets in the future. When the enterprises or dealers who need to buy the spot in the future think that the price trend of the spot market is unclear, in order to avoid the increase of the purchase cost caused by the price increase, they can buy call options of assets to preserve the value, so as to lock in the purchase cost and stabilize the profits of enterprises.