In the stock market, novice investors often encounter various technical terms. If you don't understand the technical terms of stocks, it is very difficult to make money in the stock market. Stock investment is different from other investment methods, which tests the professional knowledge and investment level of investors, otherwise it is basically a loss.

What does cash option mean?

Cash option means that in the process of trading, the party who needs to pay the transaction object can trade by choosing cash or actually paying the transaction object. This way of allowing cash payment instead of physical payment is called cash option, which can be found in both securities market and commodity futures industry, but it is called cash delivery in commodity futures.

Is the cash option good or empty?

Cash selection is good news. After the emergence of cash options, there is a high probability that the market outlook will rise, but now the number of cash options appears less. In fact, the cash option gives the minority shareholders or the old shareholders the option to avoid their relatively large losses. From this perspective, cash options are also good for shareholders.

Cash option is essentially a put right, which is simply understood as selling the equity of the target company at the agreed exercise price, in which the exercise price refers to the exercise price. When there is a cash option, only when the stock price in the secondary market of the listed company is lower than the price agreed during the exercise period, investors can make a profit when applying for exercise, otherwise there will be a loss.

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