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Options | Web Scraping Tool | ScrapeStorm

2025-01-24 14:33:42

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Abstract：Options are a type of derivative financial instrument. ScrapeStormFree Download

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Introduction

Options are a type of derivative financial instrument. They give the holder the right, but not the obligation, to buy or sell a certain asset (such as stocks, bonds, foreign exchange, commodities, etc.) at a pre-agreed price (called the strike price or exercise price) at or before a certain time in the future. The option buyer obtains this right by paying a premium (option fee), while the option seller receives the premium and assumes the obligation to perform the contract when the buyer exercises the right.

Applicable Scene

Enterprises or individual investors can use options to hedge the price risk of assets or liabilities they hold. Investors can make profits by predicting the price trend of the underlying asset and purchasing corresponding options. This kind of speculation usually has a high leverage effect, that is, investors only need to pay a small premium to obtain a larger potential profit (or loss).

Pros: Options trading usually has a high leverage effect, allowing investors to control a larger asset value with a smaller amount of money, thereby amplifying potential gains. For the buyer of the option, the maximum loss is limited to the premium paid. Even if the market moves unfavorably, it will not exceed this amount. This feature makes options a powerful tool for risk management.

Cons: The price of an option includes time value, which will gradually decrease as the expiration date approaches. This is disadvantageous to the option buyer because even if the price of the underlying asset changes in a favorable direction, the overall value of the option may decrease due to the decrease in time value. The trading and strategy of options are relatively complex and require investors to have certain financial knowledge and market experience. For beginners, it may be difficult to understand and master option trading.