Current location - Trademark Inquiry Complete Network - Futures platform - What is the easy-to-understand explanation of in-price option, out-of-price option, call option and put option?
What is the easy-to-understand explanation of in-price option, out-of-price option, call option and put option?
In option trading, call option and put option are two basic types of options, representing different trading directions and rights.

What is an in-price option? In-price option is an option with intrinsic value. The higher the option price, the higher its intrinsic value and price. As the option goes deeper into the price, its Delta value will rise, and the performance of the option in profit and loss is more and more similar to that of the basic tool. Therefore, the Delta value of the option in the deep price is close to 1. (Depth price means that the transaction price of call option is obviously higher than the exercise price or the target price of put option is obviously lower than the exercise price. )

Parity option means that the exercise price of the option is equal to the market price of the stock, or equivalent option. Parity option refers to the option whose execution price is the same as the real-time price of personal foreign exchange trading.

What is an out-of-price option? Out-of-price option refers to an option whose exercise price is higher than the current market price of its target (such as commodities, stocks, stock indexes, interest rates, etc.). It is an option with no intrinsic value or exercise value, and the option holder will lose money if he chooses to exercise.

"Out-of-price option" is also called "virtual option". Out-of-price option refers to an option with no intrinsic value, that is, a call option with a higher purchase price than the current futures or a put option with a lower purchase price than the current futures. If the equity capital of an enterprise is regarded as a call option, the underlying asset is the total assets of the enterprise, and the debt value of the enterprise can be regarded as the approximate pricing in the option contract. The term of options is the same as that of liabilities.

What is a call option? Call option, also known as call option, buyer option, etc. , mainly means that the "buyer" of the option has the right to "purchase" a certain number of the underlying assets at the exercise price within the validity period of the option contract.

A call option is a contract linked to the buyer. For example, the theme of assets is stocks. When buying this option, the buyer thinks that the subject matter will rise in the future, so as to make a profit. Finally, a call option is called the option. Conversely, the same is true of put options, that is, put options are a process of selling options.

What is a put option? Put option, also known as "put option", "put option" or "knock option", means that the buyer of the option has the right to sell a certain number of the subject matter at the strike price within the validity period of the option contract. If the market price of the future underlying asset falls below the agreed price (strike price), the buyer of the put option can sell the underlying asset at the strike price (higher than the current market price) and make a profit.

Put options can be divided into European options and American options according to their performance. European options must be held until maturity and cannot be executed in advance; American options can be regarded as European options with early exercise, that is, they can be exercised on any trading day before the expiration date.