How to trade option contracts?
Option contract trading is mainly a trading form of buying or selling a certain number of trading varieties at a certain time and at an agreed price. Usually, the buyer buys a call option contract or a put option contract by paying a certain premium, and obtains the right to buy a certain amount of the subject matter of the trading contract at the execution price, or the right to sell the subject matter in his hand when the price falls.
Once the option contract is concluded, the seller needs to pay a certain margin to sell the contract. The rights and obligations of the buyer and the seller of the option contract are asymmetric. The buyer has rights, but the seller has only obligations. Therefore, investors can not only subscribe for option contracts at a certain premium, but also close their positions before the contract expires, thus earning the premium difference.
Simply put, options are the right to trade stocks. When the option goes up, the proceeds of the buyer's subscription are the option premium and the exercise price. When the option falls, the buyer who subscribes for the option naturally needs a loss premium. In essence, trading options are actually trading stocks and their volatility. During the trading period, investors need to observe the trend of the market and look for the rising and falling trend.
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Summary: Option contract trading is the right to buy or sell an asset within the validity period. Generally speaking, trading is a right. However, all users who trade options need to pay a deposit in the process of trading call or put options.