Pay with one hand and pay with the other.

take the initiative to exercise on the day of exercise (remember to take the initiative, otherwise it will be considered as giving up)

then T+1 will be delivered, and T+2 money and coupons will be received separately.

the exercise risk is high, so the liquidation is generally chosen.

even if you exercise after the close of the exercise day, the 5ETF that arrived on T+2 doesn't know what the price is. Maybe it seems that you have made a profit, but you have to lose money when you can sell it.

so generally choose to close the position.

the call (put) option of SSE 5ETF gives the buyer the right to buy (or sell) SSE 5ETF at a specific price at a specific time in the future.

the last trading day/exercise date of p>5ETF options is stipulated on the fourth Wednesday of each contract expiration month (postponed in case of legal holidays).

let's talk about how options are exercised if they are to be exercised.

since the 5ETF option is a European option, the "exercise declaration" instruction can only be submitted on the last trading day/exercise day. ?

The time periods specified by the Exchange for submitting the "exercise declaration" instruction include 9:15-9:25, 9:3-11:3 and 13:-15:3 on the last trading day/exercise day, that is, the call auction on that day, the continuous trading and the time period within 3 minutes after closing. Judging from this regulation, if the deep real option will be submitted to the exercise declaration at an earlier time, it is estimated that the flat or slightly imaginary option will have to decide whether to exercise it half an hour after the close, so why will the imaginary option be required to exercise by the buyer? Look at the following steps. ?

step 1: before 15:3 on t day, the obligee (buyer) submits the "exercise declaration" instruction, and its exercise option position will be frozen, and the obligor (seller) does not need to do any operation for the time being.

Step 2: China Clearing & Broker will fully check the capital and securities of the "exercise declaration" instruction after the closing of T-day, and the number of underlying securities that the exerciser of put option needs to hold is ∑ (contract multiplier * exercise quantity). For example, if one exercise 5ETF is sold for 22 in January, then 1, (1, * 1) copies of 5 ETFs can be prepared.

the exerciser who subscribes the option needs to hold sufficient funds: ∑ (exercise price * contract multiplier * exercise quantity). For example, if you exercise a 5ETF to buy 22 in January, you can prepare 22 RMB (2.2*1*1). Otherwise, the "exercise declaration" instruction will fail. A valid exercise declaration will be paired with the obligor.

Step 3: On the day of T+1, the exercising party and the obligor make up enough funds and securities needed for the delivery. ?

Step 4: After the closing of T+1, China Clearing Company will distribute the securities and funds of the designated obligor to the exerciser of the option.

Step 5: After the opening on T+2, investors can dispose of the obtained securities and funds by themselves. Careful friends may find that if it is the exercise right of the subscriber, the delivery date of the option contract is the next trading day of the exercise date. That is to say, exercise on T day, get the goods on T+1 day, and close the position on T+2 day. After the ten thousand exercise, the buyer of the call option participating in the exercise will probably change from the original profit to the loss. You can take a look at the delivery case in May 215 (due date is May 27, 215). (This is the risk of exercise.)

Similarly, the seller of put option is also faced with this uncertainty. Once it is allocated exercise, it will buy the corresponding share of 5ETF at the exercise price, and it will be closed on T+2. For the sellers who subscribe for options and the buyers who put options, the exercise risk brought by T+2 mechanism is relatively limited.

among them, once the call option seller is assigned to exercise, it needs to sell the corresponding share of the target at the exercise price, and the seller needs to prepare enough targets on the delivery date. So, for the call option seller, it is the most important thing to judge the possibility of being exercised and prepare the target in advance, and the breach of exercise will be fined. As for the price trend of the target after T, it has no effect on it. (Unless the seller fails to accurately predict the number of targets required for the exercise, it is necessary to make up for the lack or liquidation of redundant targets on T+1);

once the put option buyer applies for exercise, it will sell the corresponding share of the target at the exercise price. Theoretically, as long as the target corresponding to the required exercise is bought at the closing price on the exercise day, the profit brought by the settlement price can be locked.

because of the low liquidity of non-main contracts, there are often opportunities for risk-free arbitrage. I remember that in October (I can't remember, it should be), at the end of the last trading day, I could buy the arbitrage of "selling at a certain value+buying 5ETF at the current price", and there was a little more profit after deducting the handling fee. Of course, this is not suitable for large funds, and it belongs to mosquito legs, and the funds will be locked for two days.

That's all for today's exercise. If you don't understand anything or need to add something, you can leave a message.