Option extension is to extend the term of option, which is actually similar to futures moving, but more complicated than futures moving. It refers to the trading process of closing, reopening and position conversion of the current option contract at different execution prices and expiration months according to the same position direction and quantity of the current position contract. Option extension can be operated through upward extension, downward extension, forward extension, backward extension and comprehensive extension.

1. How to operate option expansion?

Option extension In the extension strategy, the current position is closed and the same number of new positions are opened. Generally speaking, opening a new warehouse is one of the following five types. Upward extension: the expiration month of the new option is the same as that of the original option, but the exercise price is higher; Downward extension: the expiration month of the new option is the same as that of the original option, but the exercise price is lower; Forward extension: the exercise price of the new option is the same as that of the original option, but the expiration month is closer; Postponement: the exercise price of the new option is the same as that of the original option, but the expiration month is farther; Full extension: the expiration date and exercise price of the newly opened option are different from those of the original option. In the case of unknown market prospect, comprehensive promotion is the most ideal promotion method.

Second, options

Option refers to a contract, which originated in the American and European markets at the end of 18 and gives the holder the right to buy or sell assets at a fixed price on or before a specific 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 has rights, but does not assume corresponding obligations, and the option seller may not necessarily own the underlying assets. Options can be sold short. Option buyers may not really want to buy the underlying asset. Therefore, when the option expires, both parties do not have to deliver the subject matter in kind, but only need to make up the price according to the price difference.

To sum up, the operation of option extension needs to be carried out according to your own actual situation, and find the most suitable method to maximize profits or minimize losses, so as not to blindly follow suit to avoid increasing losses.