Compared with futures, options trading methods are more flexible and diverse, and they also have higher requirements for the underlying futures market. It is understood that in the international mature options market, liquidity and price volatility are the two key factors in judging whether a futures product is suitable for options trading. The following explains why you should choose options? What are the benefits of opening options?
1. Options are diversified trading tools that can flexibly respond to market cycles.
1. Comparison of spot, futures and options
Spot: long and short trading, simple long trading
Futures: leverage function, hedging spot market risks, precise hedging of various risks, market predictions
Options: Selling options to increase income, volatility trading, market-making trading, and rich arbitrage mechanisms
2. Options are everywhere in life
Options traders view the market from a higher perspective. Many times, you can gain insight into future stock price trends from changes in option prices. It's like saying that other people see the market as two-dimensional, but you see the market as three-dimensional, and you have an advantage over others in reducing dimensionality.
In addition, the combination of options and stocks is very flexible. You have more choices and opportunities than others. For example, if a stock seems to have hit the bottom, others will only buy the stock to buy the bottom. You can sell put, while others are waiting for a rebound. By that time, you have already made money. If the stock rises a little, you earn a little, and if you put in a little effort, you will get a little reward.
The growth of options is non-linear. At a certain point, options will explode exponentially. The nonlinear characteristics of options are very similar to life, right? Many of the things we do that have accumulated value seem to have no feedback at the moment, but at some point in the future, we will get non-linear returns that far exceed expectations.
Options in the financial market currently include SSE 50ETF, CSI 300ETF, CSI 500ETF, GEM ETF, Shenzhen 100ETF, etc.
3. The reasons why you should buy options are as follows: This article comes from: Option Sauce
1. Risks can be transferred : By buying or selling options to insure the stocks or futures contracts you hold, you can avoid risks caused by stock price fluctuations to a certain extent.
2. Spend a small amount of money to do big things : By paying a small premium, you can control a large amount of stocks or futures contracts and gain larger profits at a smaller cost.
3. Leverage the wind : Investors can use the power of options during the holding period to sell call options and enhance stock holding returns.
4. Increase the diversity of strategies : Option strategies are diversified and can meet different investment needs through different combinations.
5. Reduce capital occupation : By shorting options, you do not need to pay for all stocks or futures contracts, which can reduce capital occupation.
4. What are the benefits of opening options?
1. Can be traded in both directions : options can be both long and short. Options can also make money when stocks fall.
2. Improve capital utilization : Options are inherently high-leverage, and you can use small capital to achieve profits that can only be achieved with large capital.
3. Trading is very flexible : options can be traded multiple times at any time during the day, improving the liquidity of funds.
4. No need to research individual stocks : You only need to judge the trend of the market, and there is no need to research individual stocks.
5. Reduce risk : The buyer of options has limited risk and unlimited profit. The buyer does not need to add margin, there will be no liquidation, and there will be no forced liquidation.
6. Increase the diversity of strategies : Option strategies are diversified and can meet different investment needs through different combinations.
7. Options can create a profitable portfolio in any market condition