2. When the option expires, if it is exercised, it is the difference between the income from the difference between the exercise price and the market price and the cost paid for the option at the beginning. If you can't exercise your rights, you will lose the option fee.
Put option:
1, the option has not expired, and the profit of the option is the difference between the option fee required to buy back the option held from the market and the option fee obtained by selling the option before.
2. When the option expires, if the counterparty requests to exercise, the sum of the loss caused by the difference between the exercise price and the market price and the option fee obtained by selling the option before is the total profit and loss of the customer. If there is no need to exercise, the customer's income is the option fee.
Extended data:
Option refers to a contract that gives the holder the right to buy or sell assets at a fixed price on or before a certain date. The key points of option definition are as follows:
The right to choose is a right. An option contract includes at least a buyer and a seller. The holder enjoys power, but does not assume corresponding obligations.
2. The object of the option. The subject matter of an option refers to the assets you choose to buy or sell. Including stocks, national debt, currency, stock index, commodity futures and so on. Options are derived from these subject matter, so they are called derivative financial instruments. It is worth noting that the option seller does not necessarily own the underlying assets. Options can be "short".
Option buyers may not really want to buy the underlying asset. Therefore, when the option expires, both parties do not have to make physical delivery of the subject matter, but only need to make up the price according to the price difference.
3. Due date. The expiration date of the option agreed by both parties is called "expiration date", and if the option can only be executed on the expiration date, it is called European option; If an option can be exercised at any time on or before the expiration date, it is called an American option.
4. Execution of options. The act of buying and selling the underlying assets according to the option contract is called "execution". The fixed price agreed in the option contract for the option holder to buy and sell the underlying assets is called the "exercise price".
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