Data expansion: the role of incentive options
1, profit function If the basic form can be determined, you can sell options that are opposite to the basic form and get excess returns from them. For example, if you look at more white sugar futures, you can sell white sugar put options;
2. Insurance function. The pricing of options is very similar to that of insurance. For investors in futures, the market will fall in a certain period of time in the future, and holding futures bulls is definitely a loss.
There are many reasons why investors are reluctant to change hands in short futures:
First, because it is predicted that it will rise in the future, I don't want to miss the good market of rising;
Second, future positions is too big to sell in a short time.
However, the emergence of options has alleviated such problems. Investors can buy put options while holding a large number of long future positions. You can not only hold the bulls in your hands, but also prevent the risk of falling.