Source of options
The history of option trading can be traced back to around 1700 BC. The earliest form of option trading appeared in Genesis, which recorded that Jacob signed a contract similar to option in order to marry Laban's daughter Rachel, that is, Jacob obtained permission to marry Rachel on the condition that he agreed to work for Laban for seven years. This can be seen as an early embodiment of the concept of options. Jacob paid seven years of labor equivalent to "royalties" and obtained "rights rather than obligations" for marriage.
Another early case of option trading appeared in ancient Greece. Aristotle mentioned the story of Thales in his book Politics. Terez obtained the right to use the olive press in the following year by paying a small amount of "royalties", so as to get rich returns when the olive was harvested. This story embodies the basic concept of option, that is, to obtain the right at a certain time in the future by paying a certain fee.
? Why are options favored by the public?
Finite risk: A notable feature of options is that the risk of the buyer is limited. For option buyers, the biggest loss is limited to the premium paid, which enables investors to control potential losses in the face of market uncertainty.
Have you ever bought a ticket? If you buy lottery tickets with 2 yuan money, you have a chance to win 5 million yuan. For you, the gain is infinite, and the maximum loss is these two dollars. Option buyers have this feature, because options are leveraged, and once the expected direction is correct, they will accelerate their profits. If you make a mistake, your biggest loss is royalties. For the seller of options, the biggest gain is to receive royalties from the buyer. If the market fluctuates greatly, it will often face greater risks.
2. Leverage effect: Options provide leverage effect, that is, investors can control the underlying assets with greater value by paying relatively less royalties. This leverage effect gives investors the opportunity to participate in larger-scale transactions with smaller funds, thus gaining greater benefits in market fluctuations.
3. Diversification strategies: There are various options trading strategies. Investors can choose different options strategies according to their market expectations and risk preferences, such as buying call options, buying put options, selling call options, selling put options, and various combination strategies to meet different investment objectives.
4. Hedging risks: Options can be used as hedging tools to help investors manage the risks in the spot market. For example, investors holding spot can protect their positions from adverse market changes by purchasing corresponding options.
5.T+0 system-trading flexibility: stocks are traded under T+ 1 system, and they can be bought on the same day and sold the next day. Options and futures are traded under the T+0 system, and intraday trading does not limit the number of transactions. As long as you are skilled enough, you can enter and leave the market at any time. T+0 brings great trading flexibility. I never encourage intraday trading because it is easy to make mistakes.
6. Asymmetry of rights and obligations: The rights and obligations of futures trading are equal, so both parties need to pay the deposit, but in the option market, it is different. In order to obtain a right, the buyer paid a premium, only the right, no obligation, and no need to pay a deposit. I compare the buyer to the insured. I bought an insurance policy and got the right without any obligation. The seller in the option market, like an insurance company, gets the premium paid by the buyer, so he has to bear the obligation. The best way to ensure that the seller fulfills his obligations is to ask the seller to pay the down payment.
7. Diversification of strategies-trading has never been so free: stocks can only be profitable when they rise, and futures can be shorted more. Although there is one more direction, you should know that the market will fluctuate or consolidate slightly in many cases, and options have coping strategies even when the market is tepid or when the market rises and falls, which greatly improves the freedom of trading. Here you not only have Ximen Chuixue's long sword, but also can use the leverage of options to make a quick profit; You and Zhang Wuji's Gankun big move turned decay into magic when the market fluctuated slightly.
Options can be said to be the ultimate in technical analysis. The more accurate your judgment of the market, the more room for profit. This feature is called "precise guidance" of options.
If you buy stocks at the same time, it is difficult for the four investors to have a big difference in their yields, but through the application of different strategies in the option market, you can completely maximize the returns.