How to understand the margin and premium of options?

How to trade options correctly? The first step to filter is the rise and fall, the basic operation of the four legs, buy call and sell put is a long strategy, buy put and sell call is a short strategy, investors want to carry out options trading is need to be opened first, in the investor can go to the ** company to open a personal options account, so what does the margin and premium of the gem option mean? What's the difference?

What does margin and premium mean for GEM options?

Option margin means that in an options transaction, the buyer pays a premium to the seller, and the buyer obtains the right but has no obligation, so the buyer does not need to pay a margin except for the premium. If the seller's margin is insufficient and the seller fails to make up the margin in time according to the regulations, then the seller's 50 option contract order will be forced to close by the system.

The premium of an option is the premium paid by the buyer of an option to the seller in order to obtain the rights conferred by the option contract. The ** of the option is the ** seen in the **trading software**, and the ** of the option contains the intrinsic value and the time value. Since an option contract represents 10,000 contract units, the premium for a 50 ETF option is the current ***10,000.

What is the difference between margin and premium for GEM options?

The premium refers to the cost of buying an option, which is actually the ** of the option; Margin is the fee paid to open a position. The calculation method of the premium is more complex, including the intrinsic value of the option, the time value, the volatility, the risk-free interest rate and other factors; The margin only needs to consider the margin ratio and the market price of the contract.

1. **Option margin calculation method:

The minimum margin for opening a position

Opening margin of the call option obligation position = [pre-contract settlement price + max (12% of the previous ** price of the contract underlying - call option out-of-the-money, 7% of the previous ** price of the contract underly)] contract unit.

Margin for opening a put option obligation position = min [pre-contract settlement price + max (12% of the previous ** price of the contract underlying - put option hypothetical bundle value, 7% exercise**), exercise**] contract unit.

Maintenance Margin Minimum

Maintenance margin of call option obligation position = [contract settlement price + max (12% of the ** price of the contract - call option out-of-the-money, 7% of the ** price of the contract subject)] contract unit.

Maintenance margin of the obligation position of the wild slag cherry right during the put period = min [contract settlement price + max (12% of the ** price of the underlying - put option out-of-the-money, 7% exercise**), exercise **] contract unit.

2. Calculation method of stock index option margin:

Stock Index Options Opening Margin:

Opening margin of call option obligation position = (pre-contract settlement price contract multiplier) + max (pre-price of the underlying index contract multiplier contract margin adjustment coefficient - call option out-of-the-money, minimum protection coefficient pre-index ** price contract multiplier contract margin adjustment factor).

Margin for opening a put option obligation position = (pre-contract settlement price contract multiplier) + max (contract multiplier before the closing price of the underlying index contract multiplier x contract margin adjustment coefficient - put option out-of-the-money amount, minimum protection coefficient contract exercise ** contract multiplier contract margin adjustment factor).

Stock Index Options Maintenance Margin:

Margin for the Call Option Obligation Position = (Settlement Price of the Contract on the Day x Contract Multiplier) + Max (** Price of the Underlying Index on the Day x Contract Multiplier x Contract Margin Adjustment Factor - Call Option Out-of-the-Money, Minimum Protection Factor x ** Price of the Underlying Index on the Day x Contract Multiplier x Contract Margin Adjustment Factor).

Margin of Put Option Obligation Position = (Settlement Price of Contract Day x Contract Multiplier) + MAX (**Price of the Underlying Index on the Day Contract Multiplier x Contract Margin Adjustment Factor - Put Option Out-of-the-Money, Minimum Protection Factor x Contract Exercise** x Contract Multiplier Contract Margin Adjustment Factor).

The CFFEX issued a notice to solicit opinions on the listing of CSI 300 stock index options, and many investors are looking forward to the launch of CSI 300 stock index options. If it's true, you'll make money; Conversely, if the market is the market, you lose money.

What's more, if you continue, you will lose all the royalties. So take you to understand how much is the margin for selling a lot of CSI 300 options?

What is the margin for selling one lot of CSI 300 options?

There is a big difference between the margin calculation method of options and **, many investors do not know how to calculate the premium and margin of CSI 300 stock index options, today we will understand how much is the margin for selling a lot of CSI 300 options? Maintenance margin of call option obligation position = [contract settlement price + max (12% of the ** price of the contract - call option out-of-value, 7% of the ** price of the contract subject)] contract unit, what about put options?

Put option obligation position maintenance margin = min [contract settlement price + max (12% contract underlying ** price - put option out-of-the-money, 7% exercise **), option **] contract unit, it must be noted that investors in CSI 300 ETF options choose to sell the option contract as a seller is required to pay margin, and the amount of margin is relatively high to a certain extent.

How to trade CSI 300 options?

We all know the trading rules of CSI 300 ETF: the implementation of T+0 trading, you can sell on the same day, according to the real-time market transactions, follow the principle of priority and time priority, the rise and fall is also very large, each transaction unit is 10,000 shares, trading hours: Monday to Friday 9 a.m

30-11:30, 13:00-15:00 p.m

00, no trading on statutory holidays. ps: When you do trading, you must always remember to take profit and stop loss, when you reach the target position, no matter whether you can go up and down, you have to withdraw if you make money, don't think about making money to enlarge the target, and stop loss if you lose money.

Margin and premium for options are both funding concepts in options trading, and they play different roles in the options trading process.

First of all,The premium is the option agreed upon by the buyer and seller of the option at the time of the transactionIt can also be understood as the value paid by the buyer of the option to the seller of the option。The size of the premium is often influenced by a variety of factors, such as the underlying asset**, option expiration date, exercise**, volatility of the underlying asset, risk-free rate, and more. The premium plays a role in protecting the rights of the option seller in the process of option trading.

Secondly,Margin is another important concept of funds in the process of options trading, which refers to a certain amount of funds that the exchange requires the option seller to pay at the time of trading to ensure the performance of the transaction。The size of the margin is usually a certain percentage of the value of the futures warrant contract, and the exchange will adjust the margin ratio according to market conditions. In the case of a call option, the buyer is required to post a margin at the time of the transaction, while in the case of a put option, the seller is required to post a margin at the time of the transaction.

During the execution of an option contract, the margin can be used to pay the profit and loss generated by the option transaction to ensure the performance of the option transaction. If the option holder does not exercise the option, the margin will be returned to the option holder at the expiration of the option; If the option holder exercises the option, the margin is used to cover the quiet profit and loss of the option trade.

In short, the margin and premium of options play an important role in the process of options trading, they represent the performance guarantee and value of options trading, and understanding and mastering their meaning and role will help investors better participate in options trading.

Option margin means that the buyer pays the premium to the seller in an options transaction, and the buyer obtains the right, but there is no obligation at first. Therefore, the buyer does not need to pay a deposit except for the premium. For the seller, the buyer's premium is only an obligation and no right, so a deposit must be paid to ensure that the buyer performs the option contract when the option is exercised.

A few points of the margin calculation formula are explained with a smile:

1.The seller shall receive the buyer's premium and deposit it with the exchange as part of the seller's security deposit prior to the expiration of the option's obligations, i.e., the end of the entry.

2.Once the actual option is exercised, the put option contract will be converted to a ** contract. Therefore, the option margin formula includes the part of the margin of the pick-up contract.

3.Exercise fictitious means that the probability of containing the option is very small, and the margin charged in accordance with international practice is minus 1 2 of the value of the option. However, for deeply void options, if you subtract 1 2 of the option's void value, the margin calculation may be negative or zero, so a considerable fee is usually charged in this case.

Hello, option margin refers to the amount that the option obligor must pay in accordance with the rules in options trading. The maintenance margin is calculated on a daily basis.

Options Bullion is the amount of your own funds that you must deposit with your broker in order to start trading. Technically, there are two types of margin – initial margin and maintenance margin, which is what the broker requires you to increase in order to maintain the appropriate ratio of your own funds to borrowed funds. A put option is actually a put option, and a put option means to be bearish on the market outlook.

1. Formula for calculating option margin

The margin of an option can be divided into the following three types:

1) Margin for opening a position refers to the margin calculated by the investor when opening and selling an option contract;

2) Maintenance margin refers to the margin that investors need to pay to hold open positions at the end of the day;

3) Real-time margin refers to the intraday margin calculated according to the latest price of the underlying and the latest price of the option contract, which is used for real-time risk monitoring of the investor's account.

Shanghai and SZSE exchanges formulate different options margin calculation formulas according to the type of contract subject, and the margin calculation formula for each contract is as follows

For ETFs, the margin calculation formula for each contract is as follows: :

The Shanghai and Shenzhen Stock Exchanges clearly stipulate that the margin charged by the operating institutions to investors shall not be lower than the standards stipulated by the Exchange and ChinaClear. The option margin charged by different operating institutions varies, and the option margin of most ** companies is on the basis of **exchange. Add 10%-30%.

When investors sell and open positions, they need to calculate the opening margin that the investment needs to prepare according to the opening margin, and the opening margin is only used for front-end control, not actually collected, and when the investor's available margin balance is less than the corresponding opening margin amount family call, the sell opening declaration is invalid. After the investor sells and opens a position, the intraday options trading system will calculate the real-time margin according to the latest price of the underlying and the latest price of the option contract. After liquidation, the company will calculate the maintenance margin based on the underlying price and the settlement price of the option contract.

After the investor closes the open position, the occupied margin will be returned in real time.

Option margin refers to a certain amount of money that investors need to pay as margin when they are the seller of options when buying an option contract to ensure that they can fulfill their obligations when the option contract is executed. Option margin is paid by investors to ensure that their obligations in options trading are met and to reduce the risk of future losses.

The role of option margin is to prevent investors from losing more than the amount of margin they have already paid in options trading. If an investor is unable to meet their obligations under the options contract, then they will lose the margin they paid. However, if the investor is able to successfully meet his obligations in the options transaction, then they will receive the margin paid by them and any profits.

Option margin is divided into opening margin and maintenance margin

1.Margin for opening a position

The opening margin is to ensure the performance of the seller, and the seller needs to pay the opening deposit for the performance guarantee while selling the option and collecting the interest of the right shed.

2.Maintenance Margin

The maintenance margin is the margin calculated according to the settlement price of the obligated position contract, the underlying price and other data after the daily **, in order to cover the **volatility risk of the next trading day.

Margin calculation formula

1.The formula for calculating the opening margin

Call Option Initial Margin * Contract Unit;

Put Option Initial Margin min*Contract Unit.

Among them, the call option is out-of-the-money = max (exercise price - the previous ** price of the contract target, 0), and the put option is out-of-the-money = max (the previous ** price of the contract target - the exercise price, 0).

2.Maintenance Margin Calculation Formula

Call Option Maintenance Margin *Contract Unit;

Put Option Maintenance Margin min*Contract Unit.

Among them, the call option out-of-the-money = max (exercise price - the ** price of the contract target, 0), and the put option out-of-the-money = max (the ** price of the contract target - the exercise price, 0).

Shanghai and Shenzhen Stock Exchange Regulations

For ETF options, m=12%, n=7%. The option operator will adjust these two parameters according to its own situation, but it cannot be lower than the exchange's charging standard.