What is the difference between buying a call and selling a call in U.S. stock trading?

I believe that Tencent has a 60% chance of rising to HK$300 within six months. At the same time, it is worried that due to the overall market situation is not optimistic, Tencent is still 40% likely to fall sharply. But I'm a student, cash flow.

I was so nervous that I couldn't afford to buy a share (only 10 yuan in my pocket), and I couldn't bear the risk of a big fall.

It stands to reason that you should sell me your **, because our needs are matched – one overall bullish and one generally bearish. However, because I didn't have enough cash and I couldn't accept a big loss, the transaction couldn't go through.

At this time, you propose to me to ** a half-year period, exercise price.

It is a HK$280** option. How much is this ** option priced? Considering that I only have $10 left in my pocket, you sell me the call for $10.

In reality, the ** of the call is referenced by the market to the Blacks Coles option pricing model.

So I'll pay you $10. The $10 immediately becomes your cash income. I received the right to buy a share of Tencent for 280 yuan in the next six months (not obligation).

If Tencent fluctuates to HK$300 within six months of the transaction, I will immediately exercise my option to buy 1 share of Tencent from you for $280 and sell it to someone else in the market. My income is: -10 yuan option premium - 280 yuan ** price + 300 yuan selling price = 10 yuan profit.

In fact, if I spend 260 yuan in cash to buy Tencent at the beginning, isn't the profit 300-260=40 yuan, which is four times more than the profit of options? But the advantage of buying call for me is that I only need to pay 10 yuan in cash at the beginning, and even if Tencent plummets in the future, my maximum loss is only 10 yuan.

The good thing for you is that you make $10 in the beginning. And as long as Tencent** fluctuates below 280 yuan within half a year, the 10 yuan income is stable. Even if Tencent rises to 290 yuan, since you earned 10 yuan at the beginning, you will not lose money by breaking even.

Only when it rises above 290 yuan will there be a loss. But theoretically, your maximum income is 10 yuan, not higher. But the more Tencent rises, the more you lose, and your losses can be very high....

In this example, you are the call seller and I am the call buyer

Buying a call is bullish, the risk is losing all the premiums, and the profit can be infinite. Selling call is the counterparty of buying call, that is, bearish, if it is a naked sale, that is, there is no ** in hand, then the risk is infinite, and the income is a fixed premium. However, there is a time loss to buy a call, and the closer to the exercise date, the lower the time value.

2. There is a risk in entering the market, and investment needs to be cautious.

To buy is to go long, and to sell is to go short.

Hello, the call finger is a call option.

Buy call, that is, a call option, become long, pay the corresponding premium C, and exercise the right when the future spot **ST is higher than the agreed **X), with X's **** asset, the income ST-X-C. When the future spot **ST is lower than the agreed **x, the right is not exercised, and one option premium C is lost.

Selling call, just the opposite of buying call, is to sell a call option, become short, when the future spot **ST is higher than the agreed **x, the bulls exercise their power, the bulls take x's **** asset, and the short loses c-(st-x). When the future spot **ST is lower than the agreed **X, the long side does not exercise the right, and the short side earns an option premium C.