It refers to a contract that stipulates that the option purchaser can exercise the rights of an underlying asset at a specific time in the future, and it is a valuable and time-limited contract.

Spot bitcoin exchange trading fund

That is, trading open index fund, also known as exchange-traded fund, refers to the fund that tracks the changes of the underlying index and is listed and traded on the stock exchange. In the United States and other countries, ETFs can be used as the underlying securities of options.

Basic securities

Also known as the subject matter of the contract, it refers to the assets bought and sold by both parties as agreed in the option contracts, and it is the underlying asset corresponding to the option. The underlying securities corresponding to individual stock options are the corresponding stocks or ETFs.

Employee stock option

Refers to the standardized contract made by the exchange, which stipulates that the buyer has the right to buy and sell the agreed contract object (stock or ETF) at the agreed time and price.

Field option

A standardized option contract listed on an exchange, which has a fixed contract system and is traded in the secondary market.

Counter option

Refers to the nonstandard option contract reached by both parties to the transaction, which is not listed on the exchange and is reached by off-exchange quotations provided by different market makers.

royalty

Refers to the market price of the option contract, and the right fee paid by the right holder to the option obligor in order to obtain the rights conferred by the option contract.

cash deposit

Refers to the amount that the option obligor, that is, the seller, must pay in the option transaction according to the rules. Maintenance deposit is calculated on a daily basis.

Contract unit

Also known as contract multiplier, that is, the option contract stipulates that the contract holder has the right to buy or sell the underlying assets. For example, the contract unit of the 50ETF option is 50ETF shares per 10000.

Contract expiration date

Refers to the date when the option contracts expires, and it is also the latest date when the option right can be exercised. After this date, the option expires. Maturity is positively related to the value of call options and put options.

exercise price

Refers to the transaction price of the subject matter of the contract that is applicable to the exercise of the option right party according to the provisions of option contracts.

Executive price distance

Refers to the difference between two adjacent exercise prices of an option contract based on the same contract subject matter.

amplitude

Refers to an index to measure the degree of price fluctuation, usually expressed by the difference between the highest point and the lowest point of price fluctuation in the same object market.

Body transmission-exercise

It means that after the option contract expires, the right party who subscribes for the option pays the cash to buy the contract target, and the obligation party earns the cash to sell the contract target; Or the put option holder sells the cash of the contract object, and the debtor buys the contract object and pays the cash.

Option type, also called option type.

1. According to the direction of the obligee, it can be divided into call option and put option.

2. According to the time when the option buyer can exercise: European option and American option.

3. According to the relationship between the exercise price of the option contract and the market price of the underlying securities, it is divided into real value, flat value and imaginary value.

call option

A contract in which the right holder of an option has the right to buy an agreed amount of underlying securities from the debtor at an agreed time and at an agreed price.

Put option

It refers to a contract in which the right holder of an option has the right to sell an agreed number of underlying securities to the option obligor at an agreed price at an agreed time.

Futures option

Option contracts where option holders can only exercise their rights on the expiration date. 50ETF options (such as movie tickets, etc. ) is a European option.

American option

An option contract that the option holder can exercise at any time between the option purchase date and the expiration date. (such as exchange coupons, etc. )

Flat value

Refers to the state that the exercise price of an option is equal to (closest to) the market price of the contract target.

actual value

Refers to the state that the exercise price of the call option is lower than the market price of the contract target, or the exercise price of the put option is higher than the market price of the contract target.

Real put option

Exercise a put option with a price higher than the market price of the contract target.

Real call option

A call option whose exercise price is lower than the market price of the contract target.

virtual value

Refers to the state that the exercise price of the call option is higher than the market price of the contract target, or the exercise price of the put option is lower than the market price of the contract target.

Virtual put option

Exercise a put option whose price is lower than the target market price of the contract.

Virtual call option

A call option whose exercise price is higher than the market price of the contract target.

Parity contract refers to the contract whose execution price is closest to the target price.

Then, based on the fair value contract:

The premium of option contract is more expensive than fair value contract, that is, real value contract.

If the premium of the option contract is cheaper than the parity contract, it is a virtual contract.

Option parity relation

Refers to the basic relationship between the prices of call options and put options with the same exercise price and maturity date.

Option value

It includes two parts: one is intrinsic value and the other is time value.

trend of the times

Refers to the possibility that the price change of the contract object is beneficial to the option holder during the remaining validity period of the option. Time value and intrinsic value * * * together constitute the total value of options.

intrinsic value

This means that the value of the option can be positive or zero only when it is exercised immediately. Intrinsic value and time value together constitute the total value of options.

Volatility

A measure of the drastic changes in stock prices, usually expressed as a percentage. The volatility of stock price is positively related to the value of call option and put option.

Historical fluctuation

Refers to the fluctuation of the return on investment in the past period reflected by the historical data of the market price of the contract object in the past period.

implied volatility

It refers to investors' understanding of future volatility when trading options, which has been reflected in the pricing process of options.

Future volatility

It refers to the measurement of the fluctuation degree of the return on investment within the validity period of the option, which cannot be accurately calculated in advance and can only be estimated by various methods.

Expected volatility

Refers to the results obtained by forecasting the actual volatility by statistical inference method, which can be used in option pricing model to determine the theoretical value of options.

Average transition point

Refers to the price of the underlying securities when the option investor realizes zero investment income.

Limited loss

It means that the loss of the option buyer (obligee) is limited, that is, the buyer needs to pay the royalties, but the biggest loss is the royalties.

Nonlinear investment income

It means that the relationship between income and loss of option investors is asymmetric, and the relationship between income, loss and royalties is not linear or simple multiple.

Buying and Opening (Rights Holder)

To buy a call option or a put option. If the investor, as the right holder, has held or has not held a position, the position of the right holder will increase after the purchase is completed; Otherwise, hedge the position held by the debtor first, and then increase the position of the creditor.

Sell and close the position

Refers to selling call options or put options. Investors can only sell and close positions as rights holders, and the number of contracts sold shall not exceed the number of positions held.

Selling and Opening Positions (Debtor)

To sell a call option or a put option. If the investor holds a position as a debtor or does not hold a position, the position held by the debtor will increase after the sale; Otherwise, hedge the creditor's position first and then increase the debtor's position.

Buying and closing positions

Refers to the position held by investors as obligors (excluding covered open positions), buying options, becoming obligors or reducing the positions of obligors.

Black-Scholes model

B-S model, also known as B-S model, is a European option pricing formula put forward by two economists, BLACK and SCHOLES, in 1973, which laid the foundation for the reasonable pricing of derivative financial instruments. He won the Nobel Prize in Economics.

Binomial option pricing model

Refers to the simplified model of discrete-time option pricing proposed in 1979, which is mainly used to calculate the value of American options.

Option combination

It refers to the combination of options with maturity, quantity, exercise price and option type to form a new financial instrument to avoid risks and realize the preservation and appreciation.

Combination strategy

It means that option investors can form different combinations of profit and loss distribution characteristics through different options and combinations of options and underlying securities according to their own expectations of future underlying securities and their respective risk-return preferences, so as to achieve investment purposes.

Open a foreign exchange position

It refers to selling a corresponding number of call option contracts on the basis of having sufficient underlying securities.

Straddling strategy

It refers to buying a call option and a put option with the same exercise price and maturity date.

Killing strategy

Refers to buying a call option and a put option at the same time, both of which have the same maturity date but different exercise prices.

Ratio propagation strategy (ratio propagation)

Refers to buying a certain number of options and selling more options at the same time. The contract object and maturity date of call option and put option are the same, but the exercise price is different.

Vertical propagation strategy (vertical propagation)

It refers to buying options and selling options at the same time. These two options have the same contract object and the same expiration date, but the exercise price is different.

Strap (Strap)

It refers to buying two call options and one put option at the same time, in which the call option and the put option have the same exercise price and expiration date.

Risk of non-exercise at maturity

It refers to the risk that the real option has intrinsic value when it expires. If you don't mention the right to travel, you can't get the intrinsic value of the option.

Butterfly diffusion strategy

Refers to the compound arbitrage strategy that adopts the bull spread strategy and the bear spread strategy, including the long butterfly spread strategy and the short butterfly spread strategy.

Diffusion strategy of multi-headed butterfly

Refers to buying a call option with a lower exercise price and a call option with a higher exercise price, and selling two call options with exercise prices between the above two.

Short butterfly propagation strategy

Refers to selling a call option with a lower exercise price and a call option with a higher exercise price, and buying two call options with exercise prices between the above two.

Calendar spread strategy (calendar spread)

Refers to selling a call option that expires early and buying a call option with the same exercise price but a later maturity.

Bull market communication strategy

Refers to buying an option and selling an option with the same contract subject matter, the same expiration date and higher exercise price.

Spread strategy of bull call options

Refers to buying a call option with a lower exercise price and selling a call option with a higher exercise price, the same variety and the same maturity date.

Spread strategy of call put options

It refers to buying a put option with a lower exercise price and selling a put option with a higher exercise price, the same variety and the same maturity date.

Bear market spread strategy

It refers to buying an option on the same expiration date and selling an option with the same contract subject matter and lower exercise price.

Spread strategy of bear market call options

Refers to buying a call option with a higher exercise price and selling a call option with the same variety and the same maturity date with a lower exercise price.

Spread strategy of put options in bear market

It refers to buying put options with higher exercise price and selling put options with the same variety and the same maturity date with lower exercise price.

Vulture strategy

It refers to selling (buying) two options with different exercise prices and buying (selling) options with lower exercise prices and higher exercise prices respectively.

Stripping strategy (Strip)

Refers to buying a call option and two put options at the same time, in which the call option and the put option have the same exercise price and expiration date.

Box communication strategy

Refers to the combination of bull market spread strategy and bear market spread strategy.

financial market

Refers to a specific security in an account or strategy.

arbitrate

Refers to the position of buying and selling the same type of option with the same contract target at the same time for risk-free profit.

hedging

Refers to a conservative investment strategy that hedges the risk of another existing position through one transaction, thus limiting investment losses.

Reverse arbitrage

A risk-free arbitrage involves selling the underlying contract, selling a put option with the same exercise price and maturity date, buying a call option, and selling a futures with the same maturity month.

Conversion arbitrage

Risk-free arbitrage, including buying basic contracts, buying put options and selling call options. These options have the same conditions and buy a futures contract with the same maturity.

Paired put option

Refers to the stock bought on the same day and the corresponding number of put options to establish a hedging position. Buying put options, as insurance, can not only avoid the losses caused by stock decline, but also enjoy the benefits brought by stock price rise.

Investor classification

Refers to the hierarchical management of the authority and scale of investors' transactions according to their risk tolerance and professional knowledge.

Investor suitability management

When providing products or services to investors, securities companies should understand investors and assess their risk tolerance, understand the products or services to be provided to investors, and provide investors with products or services that match their risk tolerance.

Limited position

It refers to limiting the number of investors' positions and stipulating the maximum number of all contract positions (including covered positions) that investors can unilaterally hold a contract subject matter.

Restrict purchase

It means that the scale of funds for individual investors to buy options and open positions shall not exceed a certain proportion of their securities account assets.

Incremental value

Refers to the extent to which the stock price change of the option target affects the option price.

Delta= option price change/option base stock price change. Stock price is positively correlated with the value of call option and negatively correlated with the value of put option.

Gamma value

Refers to the extent to which the price change of the underlying stock of the option affects the Delta value. Gamma = change of delta/change of stock price of option target.

ρ value

Refers to the extent to which the risk-free interest rate changes affect the option price. ρ = option price change/risk-free interest rate change. The market risk-free interest rate is positively correlated with the value of call options and negatively correlated with put options.

θ value

Refers to the extent to which the change of expiration time affects the value of options. θ = option value change/expiration time change. Maturity is positively related to the value of call and put options.

Vega value

Index the extent to which the fluctuation of the securities price affects the option value. Vega= change in option value/change in volatility. Volatility is positively related to the value of call and put options.

risk-free interest rate

Refers to the interest rate that can be obtained without any risk by investing funds in an investment object.

Liquidity service provider

Refers to a professional trader who provides liquidity for the market or improves market quality in option trading according to the arrangement reached with the exchange.

hedging

A transaction in which an investor reduces the risk of another investment. A single stock option can hedge risks in some strategic combinations of investment practices.

There are many heads

An investor is a net holder of options, that is, he buys more contracts than he sells.

bears

Investors are net debtors of options, that is, they sell more contracts than they buy.

Maintain profits

Refers to the funds that investors guarantee the performance of the contract in the deposit account, which is the deposit that the contract has occupied.

Margin risk

It refers to the risk that investors will be forced to close their positions after selling and opening positions.

The risk of zero value

Refers to the risk that the value of virtual options will gradually return to zero when the contract expires.

High premium risk

Refers to the risk when the option price is obviously higher than the reasonable value.

Compulsory liquidation system

In some cases, the investor is notified to execute the liquidation requirements within the specified time. If the investor fails to complete the execution within the specified time limit, the remaining part will be enforced.

Unprotected option

Also known as "naked short selling", it is an option short position. If the option is short, the investor (seller) does not own the underlying stock of the contract. In the case of put option, the investor (seller) does not hold cash to buy the underlying stock.

Profit and loss diagram

It is a schematic diagram used to describe the relationship between the underlying stock price, option price and profit and loss when the option expires, and can intuitively understand the relationship between the underlying stock price and the intrinsic value of the option. Using the profit and loss line can greatly improve the ability of option users to match the strategy and investment objectives during the period.