Stock options are expected to expand optimizationAStructure of stock investors

Recently, stocksoptionThe activity continues to increase, and the position has reached a new high. There are reports that more financial options will be listed in the future, which will have an impact onAWhat impact does the stock market bring. We cordially invite Yu Wei, Vice President of Innovation Business at Huajin Securities, and HaitongfuturesYang Lei, the options supervisor, and Tan Junjun, the director of the Innovation Business Department of Galaxy Futures, provided an interpretation.

The options market is becoming increasingly mature

Recently, the Shanghai Stock Exchange50ETFHow to comment on the significant increase in activity in the options market?

Yu Wei: Firstly, due to various reasons in domestic and international markets, the stock market has experienced significant fluctuations this year. In the absence of other hedging financial instruments in the market, a significant increase in option trading volume is inevitable. Secondly, as the world's second-largest economy, there is currently a single variety of stock options, and with the gradual maturity of the options trading market, more and more investors are recognizing options. There is still a significant gap between Chinese investors and developed countries, and the level of education is very high. As more and more investors become aware of options and participate in option trading, the trading volume will continue to increase in the future.

The trading volume of derivatives is positively correlated with the trading volume of the stock market. On the one hand, it has a positive impact, and on the other hand, it is necessary to prevent excessive concentration of derivative holdings. Due to high leverage, some financial giants can use a small amount of funds to influence market trends, which needs to be guarded against.

Yang Lei:50ETFThe recent significant increase in trading volume of options reflects, on the one hand, the continuous maturity of this product after several years of market development, with more and more market participants, especially institutional clients. On the other hand, the volatility of the stock market has increased since the beginning of this year, and the market's risk aversion sentiment is strong,50ETFOptions, as a risk management tool, have demonstrated an increasingly important market role.

Since the beginning of this year, the volatility of the stock market has significantly increased due to internal and external environmental factors. In this environment, the flexibility of options and their characteristics as a risk management tool have also become more apparent. For institutional investors, options can play a good role in risk hedging or enhancing returns, and the corresponding trading volume in the options market continues to increase.

Another reason for the significant increase in option trading volume is currentlystock market indexFutures trading restrictions are still relatively strict, and market liquidity is poor. Investors have fewer risk management tools to choose from when market volatility increases. Referring to the development history of mature foreign markets, we hope to have a more stable and comprehensive stock index futures market as well as an options market that includes more varieties in the future.

Tan Jun Jun: InAAgainst the backdrop of overall poor stock performance and sluggish trading, the Shanghai Stock Exchange50ETFThe increase in options holdings and trading volume against the trend also indirectly indicates that investors have begun to actively use three-dimensional options trading tools to manage market risks and enhance investment returns. Options can not only serve as a hedging tool for investors, but their diversified strategies and adaptability to market conditions have led to a continuous and steady increase in market recognition, participation, and liquidity.

Ensure qualified investor access

Shanghai 50ETFOptions occasionally see contract gains as high as1000%The probability of occurrence is higher, especially near the expiration date, which is known as the "doomsday wheel" in the industry. How to comment on this phenomenon?

Yu Wei: This phenomenon corresponds to the "pin risk" in option trading, which refers to the risk faced when it is difficult to predict whether the option will be executed near expiration, and the small changes in the underlying assets of the option before expiration may also have a significant impact on the price and value of the option. Some speculative trading participants in options may take advantage of this phenomenon by spending very little money to buy calls near expiration (within one or two days)/Put on virtual value options. When the price of native assets fluctuates, greater than/When the exercise price is lower than the option, investors who buy the option will receive significant short-term returns, even within a day10More than double. The return is very high, but the risk is also very high. A common phenomenon is to lose all the premium on the maturity date. This is caused by the structure of the options themselves, and any option carries this risk.

At present, the entry threshold for the domestic options market is relatively high, and participants in the options market need to understand option risks. The practice of participating in market games and assuming investment risks after understanding risks and making rational judgments is worth encouraging. Therefore, this issue needs to be viewed in two parts, participation or hype. Rational participation in trading can provide liquidity to the market and offer hedging tools to investors who need to hedge risks, which is worth encouraging. And often in speculation, impulsive investors are attracted by high returns and ignore risks, unable to bear investment losses. This situation needs to be eliminated, and qualified investor access must be done well.

Yang Lei: Its essence lies in utilizing near expiry flat optionsGAMMAThe characteristic of being large and the option price fluctuating up and down in a short period of time is characterized by small gains and large losses. Strong speculation has given some investors who hold the idea of overnight wealth the motivation to participate in speculation. In the warrant market of our country, there has been a vicious speculation phenomenon, but for investors, this operation is extremely risky. During the process of price fluctuations, market participants may face significant losses, and even the result of losing everything. this is50ETFThere have been multiple occurrences in the options market, but due to the maturity of the market itself, there has not been any significant speculative speculation.

Tan Junjun: Due to the more obvious realization of option leverage attributes under the "doomsday round" effect, some investors are enthusiastic about speculating on the "doomsday round" driven by the so-called high return profits. But it is not recommended for investors to heavily bet on the "doomsday round" of options, as the value of options approaching expiration will accelerate its decline, especially for virtual options that quickly return to zero, causing drastic changes in option prices. Therefore, investors are required to have extremely high investment sensitivity. They not only need to judge the bullish and bearish trends, but also need to ensure that the intrinsic value increase caused by changes in the price and volatility of the contract subject exceeds its time value loss in order to make a profit. Investors bear great trading risks. Therefore, it is recommended that investors first pay attention to position control when participating in the "doomsday round" trading, and participate in small amounts with light positions; Secondly, if there is a significant adverse change in the intraday option price, risk control or liquidation expectations should be implemented; Finally, investors participating in the "doomsday round" trading should maintain a positive attitude, that is, they can accept the loss of all their premiums before participating in the trading.

The market calls for the emergence of new varieties

There is news that a new variety of options will be launched. How do you comment on this?

Yu Wei: The development of derivatives is a good thing for the market.

One is to provide hedging solutions for investors. At present, the stock market is only50ETFOptions, and in the case of restricted stock index futures investment, make it difficult for investors to hedge the risk of stock holdings, and the investment scale will also be limited due to risk exposure reasons. Therefore, the listing of new stock options provides new hedging methods and can also increase the investment scale of the stock market to a certain extent, promoting the development of the stock market.

The second is stable, fast, and stable market fluctuations. Options are essentially the volatility of the trading market, and trading option volatility can promote the rationalization of stock market volatility, and in extreme cases, it can also quickly restore volatility to a certain extent. This can be referred to in the United StatesVIXThe development of index options. This is in line with the premise of financial stability.

The third is to promote market specialization and institutionalization. Compared with the stock market, option investment has a higher threshold and requires certain professional knowledge. The development of the option market will screen out a considerable number of investors with professional knowledge. Developed countries have also gradually transformed from retail markets to institutional markets through research and development of financial instruments.

Yang Lei:50ETFOptions have been listed and operated for many years, and commodity options have also been launched one after another, which is a good supplement to the financial market. The size of the options market is steadily growing, the number of investors participating is steadily increasing, and the trading volume and holdings continue to increase. The overall operation is stable, and the risk management role it plays is also increasing. Launch a new oneETFThe demand for options and commodity options is increasing, and regulatory authorities and exchanges have also released positive signals.

The listing of new options will continuously enrich China's financial derivatives market, provide investors with more comprehensive risk hedging tools, and further promote the effective functioning of the securities and futures market. Since the beginning of this year, the volatility of the securities market has increased,50ETFOptions have become an increasingly popular choice for investors to hedge risks due to their low hedging costs and flexible operations, and the market size of options is steadily growing. newETFThe introduction of option varieties can meet the risk management needs of different types of investors, enrich their investment portfolio trading strategies, improve their investor structure, and promote the overall healthy and stable development of the market.

For commodity options, the introduction of new option varieties is a powerful supplement to the commodity futures market, which is conducive to enriching the risk management tools of related industry chain enterprises and improving the standardization and normalization level of risk management in China's related industries. Enterprises can achieve diversified risk management needs through flexible and diverse options trading strategies, which can help improve the situation where simple futures hedging faces significant losses and increased financial pressure in the face of unfavorable market conditions.

Tan Jun Jun: Shanghai Stock Exchange50ETFThe successful listing of options is an important supplement to the improvement of China's financial market, the field of risk management, the great enrichment of investment strategies, and the benchmarking50ETFThe trading stability has been validated by the market. But for multi-level risk management needs, the launch of option underlying tools covering the entire market is very urgent. For example, conducting appropriate research to further open up markets such as Shanghai and Shenzhen300, Deep100Shanghai Stock Exchange180Zhongzheng500Index based time weighted assets have crucial value and strategic significance for improving the structure of China's financial market, especially in the areas of risk management and underlying asset pricing.(China Securities Journal)