It refers to a contract in which the contract holder can choose to buy or sell the underlying assets at an agreed price at a certain period or at any time before that date. That is, the buyer of the option contract can choose to exercise or not.

Second, the classification of option contracts?

3. What are the elements of an option contract?

Includes the following aspects:

● Trading unit: The most successful option contract refers to the number of targets represented by each option contract.

● Lowest price change: refers to the lowest price change unit of royalty when buyers and sellers bid.

● Maximum daily price fluctuation limit: refers to that the fluctuation price of premium of option contract shall not be higher or lower than the specified fluctuation range within one trading day, and the quotation beyond this fluctuation range shall be deemed invalid.

● Exercise price: refers to the pre-specified buying and selling price when the option buyer exercises his rights. Once this price is determined, the option seller must fulfill his obligations at this exercise price, no matter what level the market price of the subject matter of the option contract rises or falls within the validity period of the option, as long as the option buyer requests to exercise the option.

● Distance between execution prices: refers to the difference between two adjacent execution prices, which is stipulated in option contracts.

● Contract month: refers to the trading month of the option contract. The expiration date of an option contract is generally one month before its contract month.

● Last trading day: refers to the last day when the option contract can be traded.

● Expiry date of option contract: refers to the last day when the option buyer can exercise his rights.

● Royalty: It is the price of the option.

● Exercise price: refers to the pre-specified buying and selling price when the option buyer exercises his rights. After the exercise price is determined, there is no option contract to discuss how the price fluctuates within the time limit stipulated in the option contract. As long as the buyer of the option requests to exercise the option, the seller of the option must perform the obligation at this price.

● Contract expiration date: refers to the latest date that option contracts must perform.