The risk of entering the option market can be seen everywhere, and it is not easy for investors to gain income in the investment market. There are many risks and trading skills in market trading. Among them, option is a financial derivative product, which can hedge the huge risks caused by futures and spot transactions.

What are the risks of option trading?

The risks of option trading mainly include premium risk, market liquidity risk, contract expiration risk, leverage risk, price fluctuation risk, option trading risk, inability to close positions and so on. It should not be ignored that option contracts are divided into call options and put options, as well as different expiration months and different exercise prices.

In option trading, both buyers and sellers are faced with the risk of adverse changes in royalties. In option trading, investors mainly face trading risk or price risk. Every option contract has corresponding contract elements, and the expiration date of the option contract is one of them. After the expiration, the option contract is invalid and no longer exists, which means that investors face the expiration risk when trading options.

In the trading market, options are relatively mature basic financial derivatives, which can manage risks, reduce costs and enhance returns. Everything has two sides, and products with advantages naturally have disadvantages. When buying and selling options, buyers and sellers will face price fluctuation risk, market liquidity risk, exercise delivery risk and operational risk.