“Can you popularize science about options?”
“Where are options traded?”
............
Yujuanjun often sees Moo friends asking this kind of question in the Moo community~
To this end, we are starting to popularize the science of options in the Moomoo Basics series
Let's start with the most basic knowledge~
Note: The high-risk nature of options trading is not suitable for all investors and may expose investors to potentially rapid and significant losses.
What are options?
Options It is a type of power. An option holder can buy or sell the corresponding stock at a certain time in the future at the price agreed upon by the option.
This power can be traded on the US stock market, and the price at which this right is traded is called a premium.
Classification of options
Options have a few key concepts:
● American options or European options. For American options, the buyer can choose to exercise rights at any time before the expiration date; for European options, the buyer can only exercise rights on the maturity date. US stock options are all American options.
● Expiration date (also known as the exercise date for European options). If you bought an option that expires on December 4, 2020, then the option will expire after that date.
● Exercise price Also known as the execution price, the buyer and seller execute according to the exercise price. Even if the market price of X shares is $10, and you buy a $15 call option, then $15 is the exercise price. If you exercise your rights, you have to buy the stock at $15.
● Premium, that is...