Options

Options are a right. Options contracts involve at least two parties, a buyer and a seller. Holders enjoy rights but do not assume corresponding obligations.

The subject matter of the option. A well-equipped subject matter is an asset that is being purchased or sold. It includes stocks, government bonds, currencies, stock indices, commodity futures, and more. Options are “derived” from these underlying objects, so they are called derivative financial instruments.

expiry date. The day when the option expires agreed by both parties is called the “expiration date”. If the option can only be exercised on the expiration date, it is called a European option; if the option can be executed at any time on or before the expiration date Execution is called an American option.

Execution of Options. The act of buying and selling underlying assets based on options contracts is called “execution”. The fixed price at which the option holder buys or sells the underlying asset agreed in the option contract is called the “strike price”.

Option trading refers to the right that can be bought and sold in a certain period of time in the future. It is the right that the buyer owns after paying a certain amount of premium to the seller. He can buy or sell a certain amount of subject matter to the seller at a pre-agreed price within a certain period of time in the future or on a certain date in the future. rights, but not the obligation to buy or sell.