Premium is the price of futures option, and it is the fee that the buyer of futures option must pay to the seller in order to obtain the rights conferred by the option contract. Also called premium, option fee and insurance premium. For the seller, it is the reward for selling futures options, that is, the transaction price of futures options. Option fee is the maximum loss that the buyer of futures options suffers when purchasing options. For the seller, selling futures options can get a royalty income immediately, without having to deliver the futures contract immediately. Of course, this also makes the seller face certain market risks, that is, no matter how the price in the futures market changes, the seller must be prepared to perform the contract. Like futures trading, in option trading, option premium, that is, option trading price, is the only bargaining element in option contract, and other contract elements have been standardized. The final determination of the option fee must also be made by the brokers of the option buyers and sellers through public bidding in the trading hall.

Execution price (execution price or execution price)

The strike price refers to the price at which the buyer of futures options has the right to buy or sell a certain number of futures contracts, and it is also the price at which the seller sells or buys a certain number of futures contracts when performing the contracts. Also called strike price and negotiation. Once this price is determined, the option seller must fulfill his obligations at this exercise price, no matter what level the market price of the option subject matter rises or falls within the validity period of the option, as long as the option buyer requests the exercise.

Therefore, if the option buyer buys a call option, the market price of the subject matter of the option, that is, the related futures contract, rises and is higher than the exercise price of the option within the validity period of the option contract, the option buyer has the right to buy a certain number of related futures contracts from the option seller at a lower exercise price, and the option seller must unconditionally sell the subject matter specified in the option at a lower exercise price. Similarly, if the option buyer buys a put option, even if the market price of the subject matter of the option contract falls and is much lower than the exercise price of the option, the option buyer can still sell a certain number of related futures contracts to the option seller at a higher exercise price, and the option seller must unconditionally buy the subject matter of the option at a higher exercise price within the validity period of the option. The exercise price is usually given in the form of increasing trading, and investors must choose one of the prices when trading options. How many exercise prices each option has depends on the fluctuation range of the subject matter price of this option. When a contract is suspended, the exchange will generally give several execution prices first, and then raise them according to price fluctuations. At the beginning of trading, one flat option, five real options and five imaginary options are announced. Real value, flat value and imaginary value are defined according to the relationship between the execution price and the subject matter price. The execution price will rise with the fluctuation of the subject matter price. If the price fluctuates greatly, many execution prices may be derived. The greater the fluctuation of the subject matter price, the more the number of execution prices; The longer the contract runs, the higher the execution price. The strike price that is too far away from the target price will have no trading volume because no one is willing to sell or buy. The contract expiration date refers to the time when the futures option contract must be performed, and it is the end point of the futures option contract, usually at some time one month before the delivery date of the relevant futures contract. This allows the option seller to buy or sell related futures contracts when the buyer exercises the option to fulfill his obligations, and has a certain time to trade futures contracts in the futures market to hedge the liquidation, so that the option seller has the opportunity to avoid the situation that he may be unwilling or not prepared to make physical delivery. European options stipulate that options can only be exercised when the contract expires, while American options stipulate that options can be exercised on any trading day (including the contract expiration date) before the contract expiration date.