For example, I bought a call option, and now in order to get this right, the right to buy stocks, I spent two dollars to assume this price. At present, the agreed exercise price is 16 yuan, but I still have the purchase cost of two yuan. Add it up to the cost of 18 yuan. When its share price rises to 17 yuan, will my exercise price be higher? In this case, it is an intermediate price. It is your choice to exercise or not.
Generally speaking, as long as it is higher than this price, you will exercise the right, but at this time you have no profit, you just reduce the loss. For example, the agreed exercise price is 16 yuan, and my option cost two yuan. If I can't exercise, my two dollars will be wasted, so I will directly lose two dollars. If he is now 17 yuan, I theoretically earned a dollar, but I spent two dollars on options, so I lost a dollar, which is equivalent to the range from 16 yuan to 18 yuan. My exercise only reduced the loss, but did not achieve profit.
When the price exceeds the exercise price of the option plus the purchase cost of the option itself, the real profit is realized. For example, it is above 18 yuan, and now it is 20 yuan. When I exercised this right, I bought it at 16 yuan, and with the purchase price of this option 18 yuan, I still made a net profit of two yuan, which was beneficial to me at this time. But no one can guarantee that this option will have a good effect. After all, it is a financial instrument.