1. Long position closing: This means that investors buy futures or options contracts and establish new long positions, that is, expected price increases. When you buy a position, you become the buyer of the contract, and you have the right but no obligation to perform the contract when it expires.
2. Short positions: This refers to investors selling futures or options contracts and establishing new short positions, that is, expected price declines. When selling and opening positions, the seller becomes the seller of the contract, with the same rights but no obligation to perform the contract when it expires.
3. Long positions: This means that investors can close their existing long positions, that is, futures or options contracts they bought before. Close the position by buying, cancel the previous contract and stop holding positions.
4. Short position closing: This means that investors can close their existing short positions, that is, futures or option contracts sold before. Close the position by selling, cancel the previous contract and stop holding positions.
These operations involve the establishment and liquidation of long (expected price increase) and short (expected price decrease) positions. Buying and selling positions are to establish new positions, and buying and selling positions are to close existing positions, which are usually used to make profits or reduce losses. These operations are very common in futures and options markets, and investors choose appropriate operations according to market analysis and strategies.
: options and futures
Option refers to a contract, which originated in the American and European markets in the late18th century. This kind of contract gives the holder the right to buy or sell assets at a fixed price on or before a certain date. The key points of option definition are as follows:
The right to choose is a right. An option contract includes at least a buyer and a seller. The holder enjoys rights, but does not assume corresponding obligations.
2. Marking of options. The mark of the option refers to the assets that are selected to buy or sell. Including stocks, national debt, currency, stock index, commodity futures and so on. Options are derived from these subject matter, so they are called derivative financial instruments. It is worth noting that the option seller does not necessarily own the underlying assets. Options can be "short". Option buyers may not really want to buy asset tags. Therefore, when the option expires, both parties do not have to make physical delivery of the subject matter, but only need to make up the price according to the price difference.
3. Due date. The expiration date of the option agreed by both parties is called "expiration date", and if the option can only be executed on the expiration date, it is called European option; If an option can be exercised at any time on or before the expiration date, it is called an American option.
4. Execution of options. The act of buying and selling the underlying assets according to the option contract is called "execution". The fixed price agreed in the option contract for the option holder to buy and sell the underlying assets is called the "exercise price".
Futures, whose English name is futures, is completely different from spot. Spot is actually a tradable commodity. Futures are mainly not commodities, but standardized tradable contracts with some bulk products such as cotton, soybeans and oil and financial assets such as stocks and bonds as the targets. Therefore, the subject matter can be commodities (such as gold, crude oil and agricultural products) or financial instruments.
The delivery date of futures can be one week later, one month later, three months later or even one year later. A contract or agreement to buy or sell futures is called a futures contract. The place where futures are bought and sold is called the futures market. Investors can invest or speculate in futures.
main feature
The commodity variety, trading unit, contract month, margin, quantity, quality, grade, delivery time and delivery place of futures contracts are all established and standardized, and the only variable is price. The standards of futures contracts are usually designed by futures exchanges and listed by national regulatory agencies.
Futures contracts are concluded under the organization of futures exchanges and have legal effect. Prices are generated through public bidding in the trading hall of the exchanges. Most foreign countries adopt public bidding, while our country adopts computer trading.
The performance of futures contracts is guaranteed by the exchange, and private transactions are not allowed.
Futures contracts can fulfill or cancel their contractual obligations through the settlement of spot or hedging transactions.