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What is royalty?
For the seller, it is the reward for selling futures options, that is, the transaction price of futures options. For the buyer of futures options, the option fee is the highest limit that the buyer's options may suffer losses. For the seller, selling futures options can get a royalty income immediately, without having to deliver the futures contract immediately. Of course, this also makes the seller face certain market risks, that is, no matter how the price in the futures market changes, the seller must be prepared to perform the contract. Like futures trading, in option trading, option premium, that is, option trading price, is the only element in option contract that can be negotiated on the exchange. Other contract elements have been standardized. The final determination of premium must also be made by the brokers of options buyers and sellers in the trading hall through public bidding.