What exactly is the deal?

Many people's questions are that after reading a lot of introductions, they still have no intuitive feelings and don't know how to operate them. Let's talk about case call options:

For example, the current price of 50ETF is 2.5 yuan/share. You think that the SSE 50 index will rise in the future 1 month, so you choose to buy 50ETF call options that expire one month later. Suppose you buy a 50ETF call option, the contract unit is 10000, the exercise price is 2.5 yuan, and it expires the next month. At present, the premium of options is 0. 1 yuan, and it needs to be 0.1×10000 =1000 yuan.

Have the right to buy 10000 50ETF at 2.5 yuan price after the contract expires. Also have the right not to buy.

If a month later, the 50ETF rises to 2.8 yuan/share, then you will definitely exercise this right. If you buy it at the price of 2.5 yuan and sell it on the next trading day, you can make a profit of about (2.8-2.5)× 10000=3000 yuan, minus the royalty of 1000 yuan, you can make a profit of 2000 yuan. The SSE 50 has gone up a lot, and of course it has earned more.

On the contrary, if the 50ETF falls after 1 month, and each share is only 2.3 yuan, then the subscription right can be waived, and the loss premium is 1000 yuan. In other words, no matter how much the SSE 50 falls, it will only lose 1000 yuan at most.