First, exercise rights
The expiration date of the option contract is the exercise date.
The expiration date of 50ETF options is the last day when the contract is valid, which is the fourth Wednesday of each contract expiration month (in case of legal holidays, the closing day of Shenzhen Stock Exchange will be postponed to the next trading day).
Statement of exercise time
If the option buyer needs to exercise the right, it shall entrust the option management institution to report through the Shenzhen Stock Exchange from 9: 15 to 1 1:30 and 13:00 to 15:30 on the exercise date.
Bullish and bearish consolidation declaration exercise right
The consolidated declaration of exercise orders refers to the investors who hold the call put option positions with the same contract target on the exercise date, choose the combination with the exercise price of the put option higher than the exercise price of the call option, and use 1 call option position and 1 put option position as the basic units to declare the exercise through the Shenzhen Stock Exchange, and the declared number is one basic unit or an integral multiple thereof. China settlement shall be settled in cash according to the difference between the exercise price of the put subscription contract.
Second, delivery
Exercise delivery date
On the next trading day of the exercise date, China Clearing will complete the exercise delivery for investors.
Mode of delivery
Option contract delivery methods are divided into physical delivery and cash delivery. Stock options of Shenzhen Stock Exchange are delivered in kind, and in special cases, they are delivered in cash.
Exercise settlement
At the time of exercise settlement, the call option buyer prepares the full amount of funds, and the seller prepares the full amount of the contract object for exercise settlement; The put option buyer prepares the full amount of the contract target, and the seller prepares the full amount of funds for the exercise settlement.
The obligor who subscribes for the option shall make up the payable target at E+ 1 after learning of the designated exercise on the exercise date (e-day). E+ 1 ends, the target payable is insufficient, and the insufficient part is transferred to cash settlement and delivery.
If the obligee of the put option encounters the suspension of the E-day target all day or the intraday suspension to the close, so the target is insufficient, it is also applicable to cash settlement.
The ETF share of cross-market stocks obtained by subscription on the same day can be used for the delivery of the exercise on the same day.
3. What should the option holder pay attention to when exercising?
(1) Decide whether to exercise the right.
For the obligee who subscribes for the option, if the option is in a true value state, that is, the exercise price is lower than the market price of the underlying asset, the obligee can purchase the underlying asset at a price lower than the market price and obtain the physical object. Therefore, the obligee may consider submitting the exercise authorization.
For the obligee of put option, if the option is in the true value state, that is, the exercise price is higher than the market price of the underlying asset, the obligee can sell the underlying securities at a price higher than the market price to obtain cash. Therefore, the obligee may consider submitting the exercise authorization.
In particular, there is a time lag between the submission of the exercise entrustment and the delivery to capital security. During this period, the market may change in an unfavorable direction. E is the exercise date, and the investor submits the exercise authorization; After the closing of E+ 1, the transfer of funds and securities involved in the exercise is completed; On E+2, investors can actually use the funds or securities obtained by exercising.
(2) Whether the exercise requires funds or securities.
When exercising, the obligee needs to ensure that there are enough funds or securities in the account to meet the requirements of exercising.
For the obligee who subscribes for the option, it is necessary to prepare sufficient funds when exercising the option in order to purchase the underlying assets.
For the obligee of the put option, it is necessary to prepare a full amount of the underlying assets when exercising, so as to sell them to the seller of the option.
The funds or securities required for the exercise must be in the designated account and can be used to ensure the success of the exercise. If there are insufficient funds or securities in the account, the exercise may not be completed.
(3) Whether the exercise authorization has been submitted successfully.
Investors who have not signed an automatic exercise agreement need to voluntarily submit the exercise entrustment within the specified time on the exercise date (generally 9: 15 to1:30 in the morning and 13:00 to 15:30 in the afternoon). If the option contract fails to submit the exercise authorization when it expires, the contract will lose the opportunity to exercise and no longer have value.
For investors who have signed the automatic exercise agreement, as long as their option positions meet the trigger conditions agreed in the automatic exercise agreement and there are enough funds and securities available in their accounts, the option management institution will automatically submit the exercise entrustment for investors. This can ensure that investors can exercise their rights automatically when they meet the conditions and do not need to submit the entrustment voluntarily.
Note that even if the automatic exercise agreement is signed, the exercise will still fail if the funds or securities in the investor's account are insufficient. Therefore, investors should ensure that there are enough funds or securities in their accounts before the exercise date to meet the conditions required for the exercise. This can avoid the failure of exercise due to insufficient funds or securities.
(4) Whether it is necessary to submit the option combination exercise.
When an investor holds a call option right warehouse and a put option right warehouse with the same subject matter, the same maturity date and the same contract unit, and the exercise price of the put option is higher than the exercise price of the call option, he can submit a merger exercise commission.
Through the merger, investors do not need to prepare additional funds or securities. In the process of merger exercise, the exercise price of call option will be used for exercise, while the exercise price of put option will be ignored. In this way, investors can buy or sell basic assets through merger exercise without paying extra fees or preparing extra funds.
4. What should be paid attention to when exercising the right of option obligor?
(1) Does the holding expire or close the position in advance?
Option holders can choose to hold the option until the option expires, or close their positions before the option expires. This decision is based on the market trend of the underlying securities and the personal transaction demand.
If the option holder chooses to hold the option until it expires, then after the option expires, the real option holder usually chooses to exercise, while the virtual option holder usually cannot exercise. At this time, the holders of virtual options may also choose to exercise, which may be because they hope to achieve better trading results through strategies such as combining exercise.
Whether it is a real option or a virtual option, the obligor of the option can be designated to exercise. For the obligors who subscribe for options, if they are designated to exercise, they need to sell their securities at an exercise price lower than the market price; For the obligors of put options, if they are designated to exercise, they need to buy each other's securities at an exercise price higher than the market price.
Therefore, as the obligor of the option, no matter whether the option is real or virtual, it is necessary to comprehensively consider various factors, including market trends and risk management, to decide whether to close the position in advance or hold it until maturity.
(2) Is it allocated?
Within the time specified on the exercise date, the option holder may submit the exercise entrustment. After the market closes, China Clearing will designate the obligor of the option according to the number of effective exercise declarations of all investors. The principle of assignment is to follow the rules of "proportional assignment" and "fractional assignment according to mantissa size".
Specifically, first, divide the effective exercise amount by the overall position of the obligation warehouse to get an exercise ratio. Then, multiply the exercise proportion by the number of positions held by each option obligor, and add up the results of score assignment according to the mantissa size, so as to determine the exercise number allocated to each option obligor.
China Settlement calculates the funds receivable and payable and the subject matter of the contract according to the exercise transfer. This can ensure the fairness and rationality of the exercise process and protect the rights and interests of option trading.
(3) Whether there are sufficient funds or securities.
On the evening of the exercise date (e-day), the obligor can inquire whether the exercise is transferred and the quantity transferred. According to the transfer result, the obligor needs to prepare the corresponding funds or securities before the closing of E+ 1. Specifically, funds need to be deposited in the derivative fund account, and securities need to be deposited in the A-share account corresponding to the derivative contract account.
If the debtor fails to prepare enough funds or securities in time according to the requirements of the transfer instruction, it will constitute a delivery breach. This may lead to the consequences of default disposal and punitive cash settlement. Therefore, in order to avoid default, the debtor should ensure that the required funds or securities are prepared within the specified time.