Dingyue Options Unlimited Hope

With off exchange individual stocksoptionThe implementation of this financial derivative product with huge trading volume abroad has gradually gained attention from domestic investors, while stock options with a broad mass base have been controlled by a few institutions. What are over-the-counter options for individual stocks as derivatives? How is it traded? What are the risks? Which category of investors is suitable? As a practitioner of stock options, let's listen to Jinshan Fishing's lecture. Misconception 1: Buying options does not require risk management
When many investors first come into contact with options, some people who are knowledgeable about options will explain that options are a great investment tool, especially call options, which havefuturesThe incomparable advantage of call options is that they not only require less capital investment, but also do not carry the risk of additional margin, resulting in limited losses and unlimited potential returns. Some personnel who popularize option knowledge are staff members of futures companies, who may emphasize the characteristics of buying options, limited risk, and unlimited potential returns. We do not deny the characteristic of options, but we need to approach it rationally: the returns are infinite. What is the probability of such a situation occurring?
Infinite returns is a relative concept, not an absolute concept. The term 'unlimited returns' is just an exaggeration and does not reflect the actual situation. Even when buying call options, the returns are limited, and infinity is just a theoretical concept.
Misconception 2: Options have higher leverage and higher risk
Generally speaking, risk and return are directly proportional, and the higher the return, the higher the risk. Does the high potential return of option trading mean that the risk of option trading is also high? What are the reasons for high returns in option trading?
So do options have higher risks? The answer is negative. For call options, limited risk is a recognized fact. For option sellers, the potential risk is infinite, but the likelihood of this risk occurring indefinitely is extremely low. In terms of the scope of use of options, they are more often used to serve risk management, bringing much higher returns than premiums, and even if there is a significant decline, the losses are relatively limited.
Therefore, although options have high leverage, the risk that investors bear depends on how they use the options. The combination of options and other assets not only does not increase the leverage level of the investment portfolio, but also effectively reduces the risk borne by investors, which is also the embodiment of the risk management function of option products.
Advantages of over-the-counter options for individual stocks
1Unlimited profits
You can own it by paying a certain percentage of the option premium (premium)10-20The right to dispose of the earnings of a stock with a market value multiple within a certain period of time. The hot spot of bull stocks has arrived, no longer miss any opportunities, increase funds and amplify returns.
2Limited losses
The biggest risk for investors is carrying orders, which can result in two outcomes: turning losses into profits or falling into a state of bankruptcy like losses. Options achieve maximum drawdown locking, and the loss from carrying orders is not related to investors. The maximum loss is the option fee, and carrying orders without pressure helps the market rebound.
3Flexible buying and selling
That familiar stock can be bought at any time before the upcoming market trend, and when the profit reaches the target level, it can be sold at any time during the contract period based on the real-time price, with a wide range of options.
4Trading Strategy
Investors can achieve the goal of diversifying risks and balancing returns by purchasing different stocks in combination and matching them in different proportions.
5Wide scope of subject matter
removeSTOutside of Shanghai and Shenzhen3000Multiple stocks or stock indices are quoted and purchased on trading days when each stock is open for trading.
Which investors are suitable for over-the-counter stock options
1Low position replenishment
Investors are staunch holders of certain stocks who have already invested a large amount of funds. When the stock price falls to a key support level, the probability of a market rebound is extremely high. Investors hope to seize this rebound to increase returns and spread the cost of capital use, but are also concerned about market risk decline or insufficient funds. In this case, they use the limited risk and leverage properties of options to purchase call options.
2Capture the news surface
There are channels to obtain significant positive news such as mergers and acquisitions, capital increases, share transfers, and financial reports of listed companies in the near future. There are channels to obtain information on the introduction of national industrial policies, plans, and support documents. There is a certain ability to predict the rotation of hot sectors. Public and private equity institutions with large funds should be informed in advance of the layout of individual stock funds. Utilize the interest free and highly leveraged nature of options to achieve large returns with small funds.
3Hedging Strategy
Options have the characteristic of non-linear risk return, with unlimited returns and pre locked risks during the contract term. For customers with securities lending business, when the stock price has uncertain rebound space and they are unwilling to give up bearish conditions, they can buy call options on the stock and pay a certain premium to hedge the risk.
4Capture dark horse stocks
There is a dedicated trading system and rules to accurately grasp the capital flow, trading volume, and technical form of individual stocks before the outbreak, and predict the opportunities for limit up.
5Market analysis and judgment
Long term tracking and analysis of stocks, through comprehensive analysis of fundamentals and technical aspects, indicates that stocks will experience a significant rebound in the near future. Due to cost of capital reasons, it is not advisable to invest a large amount of funds to purchase and wait. When and at what price should a call option with a reasonable term be purchased.
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