What do options mean?

Option refers to a contract that gives the holder the right to buy or sell assets at a fixed price on or before a certain date. The key points of option definition are as follows:

The right to choose is a right.

2. The object of the option.

3. Due date.

4. Execution of options.

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Divide by rights

According to the rights of options, there are two kinds: call options and put options.

According to the types of options, it can be divided into European options and American options.

According to the exercise time, it is divided into three types: European option, American option and Bermuda option.

StockOptionsTrading refers to the right that the buyer and the seller of option trading obtain the right to buy and sell a certain number of shares at the agreed price within a certain period of time at the expense of paying a certain option fee through negotiation, and the contractual obligations will automatically terminate after the expiration of the period.

Option, also known as option, is a contract that gives the option buyer the right (but not the obligation) to buy or sell the underlying assets at a specific price on or before a specific date.

Options, like stocks and bonds, are also a kind of securities.

At the same time, it is also a binding contract with strictly defined terms and characteristics.

The principle of option trading can be understood in this way.

For example, you take a fancy to a house, but you are short of money and don't have enough cash to buy it within 4 months.

So you discuss with the owner and hope that the owner will give you an option. You can buy the house for 800,000 yuan within 4 months.

The shopkeeper agreed, but in order to get this right, you need to pay 2000 yuan.

This right given to you by the owner is the option, and this 2000 yuan is the option fee.

This example shows two important features of options.

First of all, if you buy an option, you have the right but no obligation to do something.

You can let the option expire and never exercise it.

In this case, what you lose is the total cost of purchasing options (that is, 2000 yuan).

Second, options are contracts related to the underlying assets, so options are derivatives, that is, their value comes from other things.

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What about stock options? _ Finance _ China Network?