The Hang Seng Index is an important indicator of the price of the Hong Kong stock market. Calculated by the market value of some constituent stocks (namely blue chips), it represents 70% of the two-month average market value coverage of all listed companies on the Hong Kong Stock Exchange. Hang Seng Index Option is naturally an option trading contract with Hang Seng Index as the exercise variety.
The Hong Kong Futures Exchange launched the Hang Seng Index Futures Contract 1986 as early as May. With the success of Hang Seng Index Futures, Hong Kong Stock Exchange launched Hang Seng Index Option Contract 1993 in March.
Hang Seng Index options are divided into standard and mini. The standard type is HK$ 50 per index point, which is suitable for general investors and institutional investors. The mini model is HK$ 10 per index point, which is suitable for investors or retail investors with small funds. Every investor can choose flexibly, which is very flexible.
Each Hang Seng Index futures option contract is equivalent to a basket of high-value stocks, and only one commission is charged for each transaction, so the transaction cost is lower than buying or selling constituent stocks.
When buying and selling options, the price is the option fee you need to pay. If you exercise your rights, you must pay for buying and selling stocks. For example, the option price is 5 yuan/call option, the exercise price is 30 yuan/share, and the stock price at maturity is 50 yuan/share. If you intend to exercise instead of just eating the difference, then you have to pay 30 yuan/share.
The Hang Seng Index fluctuates greatly every day. Don't get too excited or anxious when trading Hang Seng Index options. Maintain a balanced mentality and make rational judgments. After all, the biggest loss of investment options is the loss of royalties, but the rate of return can be amazing, which can play a role in small and broad.