What does the stock futures exercise mean? The financial manager told you.
Examples of stock option exercise:
If you have the warrant of 100 A shares, the exercise date is August 1. The exercise price is 5 yuan. That is to say, by August 1, you will be eligible to buy 100 shares at the price of 5 yuan/share.
If on this day, the market price of the stock is 8 yuan, and others buy 100 shares and spend 800 yuan, you can buy 100 shares with 500 yuan on this day. If you buy warrants at a price of 0.50 yuan per share, then you have spent 550 yuan, and you must get a good deal. If you really buy it, this behavior is called exercise.
But if on this day, the market price of the stock is 4 yuan, and you will definitely not buy it at the price of 5 yuan/share, then the 100 warrant in your hand is waste paper. You must have chosen to give up exercising stock options.
Exercise mode of stock options:
American exercise (a): the warrant holder has the right to exercise at any time during the duration of the option, including before the term and the expiration date (that is, in general, the exercise start date = the first day of listing of the warrant, and the exercise end date = the expiration date of the warrant).
European exercise (e): exercise can only be carried out on the expiration date of warrants (i.e. exercise start date = exercise end date = warrant expiration date).
Bermuda Mix (B): between the United States and Europe, the holder has the right to exercise the right one or more days before the expiration date (i.e. the exercise start date =).
At present, there are only two choices in China, one is the foreign exchange option of the bank, and the other is the stock warrant. The so-called option is the right to pay the option fee and buy or sell something at the agreed price at the agreed time in the future, so there are two kinds: bullish and bearish. Because the option fee is far less than the actual transaction fee, it can enlarge the profit and loss. You can also choose to close your position at maturity. It should be noted that the option fee will not be refunded regardless of the profit or loss on the exercise date. This is different from the deposit, so if the timing of intervention is not appropriate, even if it is profitable, it may still be a loss, because the amount is less than your option fee.