How to estimate the risk of option investment?
Option investment belongs to high-yield and high-risk investment in investment and financial management, and investors should carefully evaluate the risks when investing in options. Investors can evaluate through the following aspects:
1. Price fluctuation of the underlying asset: The price of the option is closely related to the price fluctuation of the underlying asset. Investors need to analyze and predict the price fluctuation of the underlying assets to determine the possible risks of option trading.
2. Expiration date and time value: The option contract has a specific expiration date, before which the time value will gradually decrease with the passage of time.
3. Leverage effect: Option trading has a large leverage effect, and a certain amount of underlying assets can be controlled by paying a small amount of margin, which means that investors get a large proportion of income when the market fluctuates, but it also increases risks.
4. Market liquidity: insufficient market liquidity may lead to problems such as widening bid-ask spread and transaction delay, increase transaction costs and affect transaction results.
The above picture source? You know! How to prevent the trading risk of options?
Before trading options, investors should fully understand the basic knowledge of options, including options types, trading elements, risk characteristics and so on. Investors should formulate appropriate trading strategies according to their investment objectives and risk tolerance, such as choosing appropriate maturity date, exercise price and rationally allocating positions.
When trading options, you need to pay attention to controlling positions and setting stop-loss points to avoid potential losses. As an investor, we should pay close attention to relevant market dynamics, including changes in the price of the underlying assets, changes in relevant policies, and the possible impact of the macroeconomic situation on the underlying assets.
In the options trading market, intraday risk control is also very important. In short, it includes deferred revenue type, profit-taking type and free advance and retreat type. To put it simply, when there is a better market in a day, please make full use of mobile positions to maintain sustained profitability. Finally, the above views are for reference only, not as a basis for buying and selling, and are self-financing. The market is risky and investment needs to be cautious.