The income of financial assets is uncertain, and with the passage of time, this uncertainty gradually decreases, and the unpredictable part of its influencing factors is less and less, and the hidden income contained in time is also decreasing. This decreasing value over time is the "extended value" of financial assets.
Option value, that is, premium, can be divided into two parts: time value and connotation value. Among them, the connotation value mainly reflects the relationship between the execution price and the spot price, and the time value reflects the uncertainty of the future price. Due to the existence of delivery time, the price of the option target is constantly changing, and the spot price may be higher or lower than the agreed exercise price of the option.
Extended data:
The design of various terms of futures contracts is very important to the interests of all parties in futures trading and whether futures trading can be active.
1, contract name
2. Trading unit
A trading unit refers to the quantity of basic commodities represented by each futures contract traded on a futures exchange. For example, Zhengzhou Commodity Exchange stipulates that the trading unit of primary sugar futures contracts is 10 ton. When trading, you can only buy and sell at an integer multiple of the trading unit. To determine the marketing unit size of a futures contract, we mainly consider the market size of the contract object, the size of the trader's funds, the membership structure of the futures exchange and the spot trading habits of the commodity.
Baidu Encyclopedia-Futures Contract