1. Fairly
According to the rights of options, there are two kinds: call options and put options.
CallOptions means that the buyer of the option has the right to buy a certain number of specific commodities from the option seller at a pre-agreed price within the validity period of the option contract, but he is not obliged to buy them. The option seller is obliged to sell the specific commodities specified in option contracts at the price specified in advance at the request of the option buyer within the validity period specified in option contracts.
PutOptions: the right to sell a certain number of specific commodities specified in the option contract to the option seller at a pre-agreed price, but there is no obligation to sell. The option seller is obliged to purchase the specific commodities specified by option contracts at the price specified in advance at the request of the option buyer within the validity period specified by option contracts.
Option is an important hedging derivative tool to meet the needs of international financial institutions and enterprises to control risks and lock in costs. 1997 The Nobel Prize in Economics was awarded to the inventor of the option pricing formula (Black-Scholes formula), which also shows that international economists attach importance to option research.
Bermuda option is an option that can be exercised for a series of time before the expiration date. The main difference among Bermuda option, American option and European option lies in the different exercise time. Bermuda option can be regarded as a mixture of American option and European option, just as Bermuda is a mixture of American culture and British culture.
2. Divided by delivery time
According to the delivery time of options, they are divided into American options and European options. American option means that you can exercise your rights at any time within the validity period stipulated by option contracts. European option refers to the right that the Japanese can exercise on the expiration date stipulated by option contracts, but the buyer of the option cannot exercise this right before the expiration date of the contract. Upon expiration, the contract will automatically become invalid. China's emerging foreign exchange options business is similar to European options, but different. We will explain it in detail in the lecture on foreign exchange options business in China.
3. According to the subject matter of the contract.
There are stock options, stock index options, interest rate options, commodity options and foreign exchange options.
Special type
Path-related options The final return of standard European options only depends on the original asset price on the maturity date. Path-dependent option is a special option, and its final income is related to the change of the original asset price within the validity period of the option. Path-related options can be divided into two categories according to the dependence of their final income on the original asset price path: one is that their final income is related to whether the original asset price reaches a certain or several agreed levels within the validity period, which is called weak path-related options; The final return of another option depends on the price information of the original asset during the whole option validity period, which is called strong path-related option.
One of the most typical weak path-related options is the obstacle option. Strictly speaking, American option is also a weak path-related option.
There are two kinds of strong path-related options: Asian option and look-back option. The return of Asian options on the maturity date depends on the average price of the original assets during the whole option validity period. Because of the different meanings of the average, it can be divided into arithmetic average Asian options and geometric average Asian options. The final income of the put option depends on the maximum (minimum) value of the original asset price within the validity period, and the holder can "look back" the whole price evolution process and choose its maximum (minimum) value as the final price.