A call option is a contract that gives the contract holder (that is, the buyer) the right to buy a specific number of specific trading objects from the opponent at an agreed price.
2. Put option is also called "put option" or "knock out option", the symmetry of call option, one of the types of option trading, and the right to sell a certain security at a specified price and quantity in a certain period of time in the future.
After purchasing the put option, the customer has the right to sell a certain security to the seller of the put option at the price and quantity specified in the contract within the specified date or period. Generally speaking, people are willing to buy put options only when there is a downward trend in the securities market. Because, within the validity period of the put option, only when the stock price falls to a certain extent can the buyer make a profit by exercising the option.
Extended data:
Example of options
65438+ 10/month 1, the subject matter is copper futures, and its option exercise price is 1850 USD/ton. A buys this right and pays $5; Sell this right and get 5 dollars. In February 1, copper futures price rose to 1905 USD/ton, and call option price rose to 55 USD. A can adopt two strategies:
1. Exercise your rights
A has the right to buy copper futures from B at the price of 1850 USD/ton; After A puts forward the requirement of this exercise option, B must meet it and sell it to A at the exercise price of 1.850 USD/ton, while A can sell it in the futures market at the market price of 1.905 USD/ton and make a profit of 50 USD/ton (1.905-1. B lost $50/ton.
Step 2 sell rights
A can sell the call option for $55 and make a profit of $50 (55-5).
If the copper price falls, that is, the copper futures market price is lower than the final price 1850 USD/ton, A will give up this right and only lose the patent fee of 5 USD, while B will make a net profit of 5 USD.
References:
Baidu Encyclopedia-Call Option
References:
Baidu encyclopedia-put option