How options work, how options are traded

An option is a contract that originated in the American and European markets in the late eighteenth century, which gives the holder the right to buy or sell an asset at a fixed rate at a specific date or at any time before that date.

It mainly includes **, target selection**, portfolio management and risk management. Specifically, it is a method used by buyers and sellers to agree on a specific contract or contract; Choosing a target refers to the process of selecting a large value from many to invest; Portfolio management can help investors better manage risks and help improve the level of investment returns. Risk management is the act of evaluating the probability of possible losses after the **** or ** contract in order to make corresponding decisions.

2. After opening the ** account, transfer 500,000 funds, place them for 20 trading days, and the average daily assets reach 500,000 (can be **, cash, financial management, etc.);

3. The ** account under my name has half a year of trading time in Zhongdeng, and you can check it through the counter of the brokerage;

4. To meet the above requirements, open a financial account first;

5. For novice investors, you also need to do option simulation (contact the brokerage to apply for option simulation) and option exam (you need to go to the brokerage counter to participate, open examination);

If the above conditions cannot be met, investors can also choose a third-party zero-threshold position splitting platform, similar to Options, to open an account.

No matter what kind of investment is made, risk control and management need investors to be in the first place, and never trade with a full position!

Since everyone's amount of capital is different, the risk tolerance is also different. For novices, it is recommended to participate in option investment and feel the trading style and profit and loss changes in the options market. Don't always think about being able to "get rich overnight", but control the proportion of your assets.

When you are unsure, you will do less or wait and see, only when the trend is clear and the thinking is clear, then consider increasing the number of benefits and enjoy the big benefits brought by the company!

Popular explanation of option volatility: It refers to the volatility of financial assets**, which is a measure of the uncertainty of asset returns and is used to reflect the risk level of financial assets. The higher the volatility, the more volatile the financial asset** is, and the greater the uncertainty of the return on the asset; The lower the volatility, the more volatile the financial asset** is, and the greater the certainty of the return on the asset.

First of all, we need to understand what to look at in the ** of options. Options are the underlying of the future.

We should mainly study the underlying **, the underlying of the 50ETF option is 50ETF**, and its trend is basically the same as that of the SSE 50 Index.

No difference. I believe that most shareholders should still be very familiar with the SSE 50, so it should not be difficult for most people to start.

How to operate options, our step is the selection of the contract, and the first thing to choose is to recognize the contract. Expected underlying value**, we will **call the option and sell the put option.

Expected underlying **, we will **put options and sell call options.

These are just the basics, and there are many contract types in the middle of the T-shaped ** chart, which are divided according to the strike price, and can be divided into in-the-money options and out-of-the-money options.

at-the-money options. The market ** is greater than the exercise ** of the call option is the in-the-money option, and the exercise ** of the put option ** is greater than the market ** is also the in-the-money option; Out-of-the-money options are judged to be the opposite of in-the-money options; The market for at-the-money options is equal to the exercise.

The characteristics of these three types of contract values are as follows:

1. The change of the premium of the in-the-money option is greatly affected by the change of the underlying price, so the in-the-money option is suitable for buying low and selling high to earn the difference in premium.

2. Although the premium change range of out-of-the-money options is small, the cost is low. However, you can't ** options that are too over-the-money, because they will be difficult to close.

3. The time value of at-the-money options is large, which is suitable for long-term investment, but pay attention to the expiration date of the contract.

After learning to choose a contract, we can place an order. Caishun Finance hereby reminds everyone that we must plan how to close the position at the moment of opening a position, that is, set a stop-loss and take-profit point, so as to effectively avoid risks.

In February 2015, China's first on-exchange options product - SSE 50 ETF options were officially listed for trading, when we trade, one of the most important elements we need to pay attention to is, which contract we buy, and whether the type of contract we buy is put or call, so CSI 500 ETF options trading rules? How to Trade 500 ETF Options?

What are the CSI 500 ETF Options Trading Rules?

What are the trading rules for CSI 500 ETF options? According to the regulations, the trading hours are "9:25-11:00 a.m."

30, 13:00-15:00 p.m., last trading day time "9:00 a.m."

25-11:30, 13:00-15:00 p.m

00”。Different from ** and **, options are a non-linear financial derivative, that is, the value of the option is not a simple proportional relationship with the underlying asset, investors need to be familiar with the risk-return structure of options, familiar with the four basic positions of options.

ChiNext ETF options and CSI 500 ETF options trading rules: Positions opened on the same day can be closed on the same day, and T+0 long and short two-way trading is implemented. Whether it's a call or a put:

The goal of the option buyer is to change (or maintain) the option to in-the-money (in-the-money) before the expiration date, so that they can make a profit by selling the option at a lower option or at a higher option.

How to Trade 500 ETF Options?

CSI 500 ETF options are also another "newcomer" of SSE 50 ETF options and CSI 300 ETF options. It is best not to do long-term trading for novices to contact 500 ETF options at the beginning, as the intraday trading cycle is short and the time is flexible, which can avoid many risks in the market. The CSI 500 Index is a core broad-based index representing the growth mid-cap of the A** field.

Its constituent stocks are positioned between the CSI 300 and CSI 1000, with obvious small and medium-sized market capitalization.

In the 500ETF options trading market, the spread strategy is also a trading strategy that most investors use frequently, the core operation is to hold other contracts with the same parameters and the same direction but different contracts to make a profit, this mode of operation is flexible, controllable, and has low risk. For out-of-the-money options, theoretically, the final ** is classified as 0, so it is estimated that those contracts that will eventually become out-of-the-money options can be sold at a high price, waiting for the final buyer to give up the exercise and get the net premium.

In fact, option investment is not difficult, as long as investors really invest in, learn the knowledge of options, I believe that investors will soon be able to find the door, options can be used as a stop-loss investment means, through the first put option to provide insurance for the subject of holding. If you want to achieve the insurance function at a lower cost, you can choose a put option with a slight out-of-the-money, so what are the investment skills of the option? How to avoid option risk?

What are some investment tips for options?

Options are still a very new investment tool for **, for options novices, it is recommended that you enter the market lightly, trade a small amount, and then increase your position after you are familiar with it. Start small, so that even if you make a mistake, you won't pay much for tuition. In the options trading market, the underlying object is closely related to the contract, and investors must have a certain understanding of the option subject matter in the process of trading.

Generally speaking, the trend of the contract ** and the underlying ** is directly proportional, the underlying **, the call contract**, the put contract**, and vice versa, the call contract**, the put contract**.

How to avoid option risk?

Like bonds, options are a type of option. At the same time, it is also a binding contract with strict restrictive clauses and features. Options trading is very simple, just open and close positions, but it is impossible to trade without knowing a half-understanding, the risk of option trading is relatively large, how to avoid option risks?

First of all, it is required to earn at least 8 points before the capital can be guaranteed, and the commission will not be recovered below this point. Then, because of the characteristics of leveraged trading, its trading risk is greater than **.

The trading volume of the market is the most basic basis for investors to choose, the position is small, the trading is not active contracts, the market bid-ask spread is larger, it is more difficult to reach a transaction, that is, the so-called liquidity risk, the transaction ** also has disadvantages for investors. Options are also often used in hedging transactions, when we hold the corresponding spot position, we can hold the option position in the opposite direction, so that no matter how the ** fluctuates, there will always be a part of the position will be profitable, which avoids the risk in our entire portfolio.

In fact, the option operation skills rely more on technical operations, place orders according to various technical indicators, strictly follow the signals prompted by the original technical indicators, and observe the market before placing an order, so the timing and operation method of 500ETF options trading strategy?

How to understand 500 ETF options?

Compared with the CSI 300, about 80% of the weight of the CSI 300 is distributed in listed companies with a market value of more than 100 billion, so the CSI 300 is basically a relatively pure index of ** stocks. The CSI 500 is relatively diversified, with about half of its index weights in the 200-40 billion market capitalization range. In options trading in the market, there are two ways to open a position: opening a position and selling to open a position, and there is also a trading mantra circulating in the market:

Buy and subscribe if it goes up, buy put if it goes down, sell if it doesn't go up, and sell put if it doesn't go down.

When to use the 500ETF options trading strategy and how to operate it?

The listing of CSI 500 ETF options will further supplement the CSI 500 Index derivatives series, not only providing the market with more effective hedging tools, but also bringing more abundant investment strategies, for example, judging whether it will rise sharply or slightly. After judging a big fall, it depends on whether it is a big drop or a small fall. That is, to judge the amplitude.

These four subdivisions correspond to the four basic operation strategies of options.

The next step is to judge the speed, that is, whether it is fast or slow, fast or slow. Compared with the mature overseas derivatives market, the onshore equity derivatives market still has broad room for development, and it is the right time to launch ChiNext options and CSI 500 ETF options.

The steps for options trading are as follows:

Judging the direction of the judgment of the direction of the direction is accurate or not, which has a crucial impact on the success or failure of the transaction. Many of the subject matter of options trading are ** contracts or directly related to ** spot, so the method of judging the ** direction in options trading is basically the same as the analysis method of **, mainly from the macro side, fundamentals, technical aspects, market structure, trading psychology and other aspects of analysis.

Judging the speed of the speed is a very important part of option speculation, especially for the buyer of options, and to some extent, it is even the most important key to profit and loss. For the seller of the option, you can make a profit as long as you judge the correct direction; However, for the buyer of the option, there is a time loss to pay the premium, and if the speed of the ** is not evaluated enough, even if the ** direction is not looked at, it may cause huge losses.

After analyzing the direction and speed of development, investors can adopt corresponding option speculation strategies for different expectations.

Choosing Exercise** Even if an investor chooses the right option strategy in the right direction and speed, if he or she does not choose the right execution**, it may result in a loss or a small profit.

Choosing a performance term or contract There are two main factors to consider when choosing the right performance term or contract. The main consideration is the liquidity of the option contract, not only that, but also whether the liquidity is sufficient when choosing to execute, so as to open and close the position smoothly. The longer the strike period of the option contract, the larger the premium, but the smaller the decay rate of the time value.

Determine the rights and obligations of the buyer and the seller of ** options and the characteristics of risk and return, and the money management strategies of the two are also different. The maximum loss of the option buyer is determined, which is the premium paid.

Many investors want to know how to trade options in China? In fact, the operation method is also very simple, 50ETF options are the same as **, search for 50ETF options**, you can query the options**, the first step in the purchase of options is to choose options contracts in these ** for difference trading.

Looking at the figure below, in the option T-shaped ** interface, most investors can't understand it, and see that there are many contracts with different strike prices for the call and put contracts, how to distinguish them?

The part selected in the red box below is called "real value contract". At-the-money contracts are neutral contracts between real-value and out-of-the-money contracts, and they are also active contract positions.

1.Paid-in call contracts refer to:

A contract whose strike price is lower than the current price of the underlying asset.

2.A real-value put contract is defined as:

A contract where the strike price is higher than the current price of the underlying asset.

As shown in the figure below, the box selected contract (**cheap) is the "out-of-the-money contract".

1.Out-of-the-money call options:

A contract where the strike price is higher than the current price of the underlying asset.

2.Out-of-the-money puts:

A contract whose strike price is lower than the current price of the underlying asset.

The first step of option buyingIt is important to choose a contract that will allow you to make a profit, and there are four main points in the steps of option buying:

The first point is to determine the direction of the option opening

This is also one of the advantages of investing in options, many investors know that options are two-way trading, and there is a possibility of making a profit regardless of the rise or fall of the underlying asset when trading. When we trade options, we can call options if we expect the underlying to fall, and we can put options when we expect the underlying to fall, and as long as we operate properly, the chances of making a profit will be great.

Point 2: Determine the right option contract

When investing, choosing the right contract is the first step to make a profit, we can first choose the contract through liquidity, generally speaking, the liquidity of at-the-money contracts is the largest, and the number of positions is also the largest, followed by the at-the-money upper and lower contracts. Investors can also choose by the leverage of the contract, as opposed to liquidity, the more out-of-the-money the contract, the greater the leverage, and the greater the ratio of return to risk.

The third point: choose the right way to look at the market

In the options market, the option chart is a T-shaped chart, according to the chart, investors can see some data such as options, and the options are changing every minute and every second.

Another point is implied volatility, implied volatility is the potential volatility of options, which is directly proportional to options, the higher the options, the higher their implied volatility. In addition, there will be a small spread between the buying and selling prices, which is the same as the spread of ** trading, which is the commission difference earned by the exchange.

Fourth: the due date is approaching

In the options market, when trading, is to buy an option contract, the word contract, most investors should have been in contact with, the contract has a signing date and an expiration date, the expiration date of the option is generally the fourth Wednesday of each month, after the expiration of the option will lose its value, so we must pay attention to the arrival of the expiration date, and then choose whether to exercise the option according to their own profit and loss.