At present, discussions about the introduction of short-selling mechanisms such as stock index futures are all over the media. In these discussions, everyone pointed out the necessity, urgency and benefits to the market with one voice, but no one mentioned its negative effects. This is the consistent practice of our media. Well said, everyone praises it, but no negative opinions are heard. After the accident, there was a voice of accusation and shirking responsibility. In fact, this is a very irresponsible practice.
Short selling mechanism has positive significance and function to the stock market, but its negative influence can not be ignored. Especially for an emerging market with a short history, imperfect legal system, loopholes in rules and extremely asymmetric information, if its negative impact is not paid enough attention and effectively controlled, its lethality will be enough to destroy the whole market, trigger financial turmoil, undermine the stability of the situation and hinder the healthy development of China stock market. This is by no means alarmist. The history of overseas securities market development has repeatedly shown the huge negative effects of short selling mechanism.
Call options are also called call options, buyer options, call options, deferred options or "call options". Call option refers to the right of the agreement holder to buy shares at a specified price and quantity within the validity period stipulated in the agreement. Option buyers buy this call option because they are optimistic about the stock price and can make a profit in the future. After buying the option, when the market price of the stock is higher than the sum of the agreed price plus the option fee (excluding the commission), the option purchaser can buy the stock according to the agreed price and quantity, and then sell it at the market price, or transfer the call option to make a profit; When the stock market price fluctuates between the agreed price and the sum of option fees, option buyers will suffer certain losses; When the market price of the stock is lower than the agreed price, the option fees of the option buyers will all disappear, and they will give up buying options. Therefore, the biggest loss of option buyers is nothing more than option fee plus commission.
Call option means that the option buyer has the right to buy a certain number of subject matter at the execution price within the validity period of the option contract.
Put option is also called put option, seller option, put option, put option or elimination option. Put option means that the buyer of the option has the right to sell a certain number of the subject matter at the execution price within the validity period of the option contract, but does not undertake the obligation of selling.
Put option gives investors the right to sell assets at a specific execution price on or before a specific date. For example, a put option with an exercise price of $85 on Exxon stock 10, which expires in 10, gives its owner the right to sell Exxon stock for $85 before or after the expiration of 10, even if the market price of the stock at that time is lower than $85. When the value of assets falls, the profit of put options will increase. Only when its holder determines that the current price of the asset is lower than the exercise price will the put option be exercised.