Option, also known as option, gives its purchaser the right to buy or sell a certain amount of certain assets (underlying assets) at the price (exercise price) agreed by both parties within a specified period. After receiving the royalty, the option seller has the obligation to perform the contract according to the buyer's requirements. The so-called option trading is actually the sale of this "right".

The main differences between options and futures are summarized as follows:

There is no commission for futures trading, and option trading is the commission paid by the buyer to the seller. Futures buyers and sellers have equal rights and obligations, and they need to pay a certain percentage of deposit when participating in the transaction;

The option buyer pays the royalty, does not undertake the obligation, and has the right to choose to exercise or cancel/give up the automatic exercise, and does not need to pay the deposit. When the buyer applies for exercise, he will check whether the account funds are sufficient;

The seller undertakes the obligation to perform. If an investor sells American options, he will face the risk of performing at any time. If he is drawn by the exchange for execution, he will concentrate on it after the close. Therefore, the seller needs to pay a down payment to ensure its performance ability.

Relationship between options and futures

Commodity options: The subject matter is the corresponding futures contract, and the corresponding futures contract position will be obtained after the exercise;

Shanghai and Shenzhen 300 stock index options: the same as the subject matter of stock index futures, it is the corresponding stock index. The SSE 50ETF option corresponds to the Huaxia SSE 50ETF.