Current location - Trademark Inquiry Complete Network - Futures platform - Examples of corn futures
Examples of corn futures
Answer the landlord; As a seller of options, his biggest profit is premium, but his risk is infinite, so he has to charge a little more than the intrinsic value of options, which is called "time value".

As for "the price of an option is 10 yuan, the value is 8 yuan, and the time price is 2 yuan. If I buy it, it is equivalent to losing 2 yuan", which cannot be simply understood on the surface. Let me give you an example:

Let's take a call option as an example. Suppose there is such a call option.

-

Subject: corn futures

Exercise price: 1600 yuan/ton.

Maturity date: June 65438+1 October1

Exercise ratio: 1( 1 option can be purchased at exercise price 1 ton of corn futures).

-

So if the current price of corn futures is 1608 yuan/ton, then the intrinsic value of this call option is just 8 yuan, but the price of this option is 10 yuan, so I bought 1 share, so I lost 2 yuan. On the surface, this is true, but don't worry: suppose the corresponding corn futures price reaches 1.700 yuan/ton on the maturity date (or during this period), then the intrinsic value of the option you bought with 10 yuan will become 100 yuan at this moment, ten times! I believe that the option price at that time would exceed 100 yuan, so I just said that its price was just 100 yuan. At this time, you have two choices:

1. You can directly sell your options at the market price of 100 yuan, and directly get the earnings of 90 yuan (per share).

Second, you can also exercise to buy the corresponding corn futures at the exercise price of 1.600 yuan/ton, and at this time, the corn futures price has reached 1.700 yuan/ton, so you can completely sell the exercise-bought corn futures at the market price of 1.700 yuan/ton and make a profit of 1.000 yuan/ton.

That's what I'm talking about. We can't simply look at this problem from the surface, but do more in-depth research and analysis.