Why are the prices of different option contracts with the same subject matter and the same expiry date more expensive than others? The reason lies mainly in intrinsic value. 1. What is intrinsic value? Intrinsic value refers to the value without considering option costs and transaction fees.
You know, who is Shunliu? He is a master who can kill the Japanese captain with one shot, and his sniper buff points will be directly raised to the highest level. Such a person, in the independent group, is a living treasure that Li Yunlong brings with him. People like Monk Wei are very important to them. Do you believe it? A person like Shunliu can hold the position of a company commander in the independent regiment, and at worst he can be a deputy company commander. Do you think Li Yunlong will help such a person?
Take Monk Wei as an example. Monk Wei was just a small guard at the time. As a result, he was killed by the second master of Heiyun Village. Do you know what he did? Without saying a word, he mobilized a battalion of troops. Even if he risked offending Kong Jie and his old comrades, he would avenge Monk Wei and pursue and beat up Heiyun Village. Where was Heiyun Village? Xie Baoqing had been operating there for many years, but he was still wiped out by Li Yunlong.
At this time, do you think Li Yunlong will avenge Shunliu? He will never let Shunliu die. His sister's matter is not a personal issue, but the spirit of the entire independent regiment. Don't talk about whether they can come back by then. The Japanese army has already launched the second Ping'an County Battle. You really don't think that Li Yunlong is a free man. Someone said that at that time they not only had to face the Japanese army, but also the national army.
Yeah? Didn't Chu Yunfei also attack Li Yunlong's troops in the later stages of the play? What was the result? Li Yunlong retaliated the next day and handed over their weapons and equipment. Along with the 55th National Army Division that appeared in the plot, do you think Li Yunlong didn't dare to backhand and take the blame? You are also underestimating Li Yunlong's strength in the later period. Li Yunlong's army in the later period has already reached several thousand people, and can compete with Li Huan's 55th Division.
At that time, with Li Yunlong's temper, if Shunliu is killing the Japanese army and someone dares to stop him, let alone the 55th Division who dares to resist, everyone still remembers that when Chu Yunfei attacked Li Yunlong's troops in the play, Li Yunlong fought back directly without any hesitation. Damn it, he was talking about plan No. 2, which meant that he had been on guard against Chu Yunfei for a long time. If Shunliu appeared in Li Yunlong's world view, maybe Li Yunlong would also design a special combat plan to deal with the 55th Division of the National Army.
Moreover, Li Yunlong is a master who never suffers losses. When he sees that he is about to suffer losses, he will never let go of the people of the 55th Division. Maybe he will get something for you. At that time, he will be drunk and disarmed again, and it will be easy to eat some weapons and equipment of the 55th Division. What's more, the Independence Regiment is a battle-tested regular army, and the 55th Division is a unit that has not experienced the baptism of war. It is not difficult to eat them.
People's Daily Online, Hefei, March 5 (Chen Xi, Chen Ruotian) This morning, the 2021 MBA class of Anhui University of Finance and Economics opened in Hefei. The Hefei Institute of Advanced Studies welcomed its first batch of students, and Anhui University of Finance and Economics has entered a new stage.
Zhou Jialai, member of the Standing Committee of the Party Committee and Vice President of Anhui University of Finance and Economics, said at the opening ceremony that standing at the historical starting point of the reform and development of higher education in the new era, the opening of the first MBA class of the Hefei Institute for Advanced Study of Anhui University of Finance and Economics is an important measure for the school to achieve leapfrog development under the guidance of the "Anhui Finance New Economics and Management" strategy. The school will make full use of the strategic high ground of the Hefei Institute for Advanced Study, with the theme of high-quality connotation development, to further promote the creation of domestic first-class disciplines and first-class characteristic high-level universities, and to cultivate future-oriented managers and entrepreneurs with good historical perspectives, humanistic qualities, corporate responsibility, basic economics and business knowledge for the society. Not long ago, the Anhui Provincial Department of Education and the Anhui Provincial Development and Reform Commission jointly issued the "Anhui Province's "14th Five-Year Plan" Education Development Plan, clearly proposing to support Anhui University of Finance and Economics and other universities in establishing advanced research institutes in Hefei.
The first MBA class of Hefei Institute for Advanced Study of Anhui University of Finance and Economics started. Photo by Chen Ruotian, People's Daily Online
As the only financial university in Anhui Province, Anhui University of Finance and Economics has unique advantages in talent training, discipline construction, and social services. Hefei Institute for Advanced Study is a high-end research institution jointly established by the Hefei Municipal People's Government and Anhui University of Finance and Economics. It is committed to building a platform for cultivating practical innovative talents in finance and economics, a national-level high-end financial think tank platform, a "Double Thousand" open platform for international exchanges and cooperation, and a gathering platform for high-level financial and economics talents. Based on this, the school will gradually carry out phased training of part-time professional master's students in Hefei, making the Hefei Institute of Advanced Studies a functional entity for the school to carry out high-level talent training, scientific research and social services, and provide intellectual support for the construction of a new stage of modernized Anhui, Hefei's "Five Highlands and One Demonstration" and the construction of a financial center city. The MBA class that starts today can cultivate high-level management talents in Hefei in the fields of foreign trade, international management of enterprises, and investment risk management.
It is reported that after the Hefei Institute of Advanced Studies of Anhui University of Finance and Economics was established in Hefei, the school began the planning and construction of campus functions and released a talent recruitment announcement for the Institute of Advanced Studies, with the first batch of 100 Ph.D.
Why are the prices of different option contracts with the same subject matter and the same expiry date more expensive than others?
The reason lies mainly in intrinsic value.
1. What is intrinsic value?
Intrinsic value refers to the income that the buyer can obtain if he exercises the option immediately, without considering option costs and transaction costs.
For example, there are two unexpired call options: A has an exercise price of 90 yuan, and B has an exercise price of 110 yuan. When the underlying asset price is 100 yuan:
If call option A with an exercise price of 90 yuan is exercised immediately, a profit of 10 yuan will be made, and this 10 yuan is the intrinsic value;
If call option B with an exercise price of 110 yuan is exercised immediately, it will lose 10 yuan, which means it has no intrinsic value.
2. How does intrinsic value affect option prices?
If the above call options A and B are on sale, which one do you think has a higher price?
Obviously A. Because it has an intrinsic value of 10 yuan and can bring 10 yuan of income to the buyer, it is more valuable. In fact, the intrinsic value of 10 yuan constitutes the "floor price" of option A and represents the "real" value part of the option.
Suppose another call option C comes with an exercise price of 80 yuan. When the underlying asset price is 100 yuan, who is more expensive, C or A?
The answer is C, because C has an intrinsic value of 20 yuan and can bring 20 yuan of income to the buyer, while A has an intrinsic value of 10 yuan and can bring 10 yuan of income to the buyer.
It can be seen that the greater the intrinsic value, the higher the benefits to the buyer and the more expensive the option price.
Intrinsic value is determined by the relationship between the exercise price and the price of the underlying asset. When the underlying asset price is constant, the lower the call option exercise price, the greater the intrinsic value and the more expensive the option price.
For example, as shown in the screenshot below, when the Shanghai Silver 2512 futures price is 11393, the exercise price of the call option decreases from 11400 to 10500, while the intrinsic value increases and the option price becomes more expensive.
If there is no intrinsic value, the option with a lower exercise price will be more expensive. This is because the lower exercise price is closer to the price of the underlying asset and is more likely to have intrinsic value. For example, in the screenshot, the option price with an exercise price of 11,400 is more expensive than the option with an exercise price of 11,500.
Screenshot from: Flush Futures
For puts, the opposite is true. The higher the strike price, the greater the intrinsic value (or the greater the likelihood of becoming intrinsically valuable), and the more expensive the option, as shown in the screenshot below.
Screenshot from: Flush Futures
3. Intrinsic value is dynamic
To understand intrinsic value, you should also pay attention to one thing: intrinsic value is not static, but changes with the price of the underlying asset. For example, for a call option with an exercise price of 100, as the underlying price fluctuates, the intrinsic value changes as follows:
That is, as the price of the underlying asset changes, the intrinsic value may increase or decrease. Therefore, an option that has intrinsic value when purchased may become intrinsically valuable, and an option that has no intrinsic value may become intrinsically valuable.
On the 2nd, South Korean President Lee Jae-myung delivered a speech in the National Assembly to explain the supplementary budget totaling 26.2 trillion won. He said: "The outbreak of the war in the Middle East has entered its 34th day, but it is still impossible to predict when this crisis, considered by the outside world to be the most serious energy security threat, will end."
He added that the slower the pre-emptive response, the greater the damage to South Korea's economy and people will be. Therefore, he urged Congress to pass the supplementary budget as soon as possible.
It will take time to restore damaged infrastructure in the Middle East
In his speech that day, Li Zaiming pointed out that the current crisis is not a fleeting shower, but a violent storm with an unknown duration. He emphasized that even if the war ends tomorrow, it will inevitably take a lot of time to complete the reconstruction of the destroyed energy infrastructure in the Middle East and for the supply and demand relationship to return to its previous smooth state.
Lee Jae-myung expressed concerns about the economic outlook. He pointed out that as the global economy comes to a standstill, the spark of economic growth that South Korea has finally rekindled is at risk of being extinguished.
He further explained that after the Korea Composite Stock Price Index exceeded 5,000 points, thanks to the excellent performance of domestic companies in fields such as semiconductors and shipbuilding, the Korean economy had an opportunity to take off, but it encountered this sudden compound crisis.
Oil supply disruptions have caused gasoline and diesel prices to skyrocket, while shortages of raw materials are threatening a wide range of livelihoods including the production of vinyl-containing plastic products and fertilizers. He emphasized that the government must take more thoughtful response measures given that the current situation may not end in the short term.
A debt-free supplementary budget that does not use national debt...to make use of 25.2 trillion won in excess tax revenue
Lee Jae-ming made it clear that the supplementary budget submitted this time is a "debt-free supplementary budget" that does not involve the issuance of government bonds. He said that thanks to the prosperity of the stock market and semiconductor industry, the government will use 25.2 trillion won in excess tax revenue and combine it with 1 trillion won in fund resources.
He added that this system design ensures that during the Middle East war crisis, bold investments can be made in key areas without passing on the fiscal burden to the national and macroeconomics.
Li Zaiming listed "protecting vulnerable groups in society" and "improving the economic structure" as specific goals of the supplementary budget. In terms of stabilizing people's livelihood, he introduced the "High Oil Price Loss Support Fund" project.
The project will provide local currency subsidies of up to 600,000 won to those in the bottom 70 percent of income groups. He said the move was aimed at easing the twin burdens of high oil prices and inflation faced by ordinary people.
In terms of youth support policies, he promised to expand entrepreneurship and employment opportunities. He pointed out that this crisis will inevitably have a more serious impact on young people who are new to society.
In the energy sector, he announced a record-breaking renewable energy support package totaling 1.1 trillion won. He said the government will turn this energy crisis into lessons learned and development opportunities, and accelerate the transition to renewable energy.
Lee Jae-ming also announced that the government will double the number of "dream centers" that provide basic food and daily necessities for free, from the existing 150 to 300. He emphasized that it is necessary to ensure that people do not take extreme paths or fall into crime due to food shortages.
He went on to point out that the government will further expand the coverage of rural basic income to broadly support rural areas that are plagued by population decline and aging. At the same time, he mentioned that the government will pay more attention to the issue of social polarization, pointing out that the gap between rich and poor is currently widening among various classes, generations and industries.
Zero tolerance for hoarding… Overcoming crises depends on speed
In his speech, Lee Jae-myung repeatedly emphasized the unity of the social community and the determination of the National Assembly. He declared that the government will strictly follow the zero-tolerance principle and crack down on any unfair behavior such as colluding with price increases and hoarding to make huge profits by taking advantage of the social crisis.
He called on the whole society to save every drop of oil, avoid wasting even a plastic bag, understand each other and unite as one, so that South Korea can safely and quickly get out of the haze of this crisis. He promised that governments and public officials, including himself, would lead by example with extraordinary determination.
Li Zaiming pointed out that the success or failure of overcoming the crisis depends on the speed of action. He likened the supplementary budget to a breakwater that protects people's lives from the waves of crisis and a springboard for leapfrog growth.
He strongly called on the government, Congress, and the ruling and opposition parties to work hand in hand in the face of a national crisis and work wholeheartedly for the development of the people and the country with pure dedication.
After his speech, Li Zaiming shook hands with the members present. He also walked to the seats of National Power Party members to shake hands and communicate with them.
Source: President Lee Urges Swift Approval of 26.2 Trillion Won Supplementary Budget
One contract, two directions, four ways to play, and understand the five parameters, you will hold the key to the options world.
Options are often labeled as "high risk" and "complex," which discourages many investors. However, at its core, it is a standardized contract that confers rights, and once you understand its core logic, it can become a flexible and powerful tool in your investment toolbox.
This article will take you to systematically sort out the core knowledge of options from definition to practice, laying a solid foundation for you.
01 The essence of options and the two classification dimensions
What are options? Options, also known as options, are essentially a financial derivative contract. It gives the holder (buyer) a right, but not an obligation: to buy or sell a certain amount of the underlying asset at a pre-agreed price on or before a specific date.
In order to obtain this right, the buyer needs to pay a fee to the seller, that is, a royalty. This is essentially pricing rights and obligations separately in finance.
The classification of options is mainly based on two core dimensions:
1. Divide according to the direction of rights:
Call option: gives the holder the right to "buy" the underlying asset. You buy call options when you expect the price of an asset to rise.
Put option: gives the holder the right to "sell" the underlying asset. When you expect the price of an asset to fall, you buy a put option.
Simple memory: Call = buy option, put = sell option.
2. Divided by performance date:
American options: can be exercised on any trading day before the expiration date. Most of the U.S. stock options we usually trade are American-style.
European options: can only be exercised on the expiration date.
In addition, options can also be divided into stock options, stock index options, commodity options, etc. according to the underlying assets.
02 Understand the five core parameters of options
To evaluate the value and risk of an option, you must master the following five core parameters:
1. Underlying asset price: the core of option premium pricing. The premium will change as the price of the underlying asset (such as a stock price) fluctuates.
2. Exercise price: The fixed buying and selling price agreed in the contract. This is the basis for future exercise.
3. Expiration date: the “shelf life” of the option. After expiration, if the option is in-the-money (in-the-money), the broker will generally exercise it automatically for you.
4. Premium: the market price of the option, which consists of two parts:
Intrinsic value: the profit that can be obtained by exercising the option immediately. For example, if the stock price is 120 yuan and the call option exercise price is 100 yuan, the intrinsic value is 20 yuan.
Time value: The portion of an option price that exceeds the intrinsic value and reflects the value of uncertainty brought about by the remaining time. It decays faster as the expiration date approaches.
5. Implied volatility: It can be understood as the "price-to-earnings ratio of the option." The higher the value, the more drastic the market expects future price fluctuations, and the option premium is usually more expensive, which is beneficial to the seller; vice versa, it is beneficial to the buyer.
In addition, professional option pricing models will also consider parameters such as risk-free interest rates, but the impact on novices is relatively small.
03 Income calculation: taking call options as an example
Using a specific case, you can clearly understand how the return of a call option is calculated.
Assumptions:
Current stock price: 80 yuan
Call option exercise price: 100 yuan
Expiration date: May 21
Royalty: 10 yuan/share
Quantity to buy: 5 sheets (1 sheet corresponds to 100 shares)
Expected expiration stock price: 150 yuan
Earnings estimate (simplified version, assuming the value returns to zero near expiration):
Profit = (expected stock price - exercise price - premium cost) × number of contracts × contract multiplier
= (150 - 100 - 10) × 5 × 100
= 20,000 yuan
If the stock price does not rise above the exercise price (100 yuan), the option has no intrinsic value, and the maximum loss is the entire premium cost, that is, 10 × 5 × 100 = 5,000 yuan.
04 Four Basic Operations: Risk and Return Map
All complex option strategies are based on a combination of the following four basic positions.
1. Buy call options
Operation: Pay the premium and obtain the right to buy.
Profit and loss characteristics: The maximum loss is the entire premium; theoretically unlimited gains (the stock price has unlimited room for increase).
2. Selling call options
Operation: collect the premium and assume the obligation to sell assets at the exercise price in the future.
Profit and loss characteristics: The maximum profit is the premium received; if the corresponding assets are not held (i.e. "naked selling"), the risk is theoretically unlimited when the stock price rises, so novices should avoid naked selling of call options. If you hold assets (covered positions), you can use them to enhance returns or hedge some risks.
3. Buy put options
Operation: Pay the premium and obtain the right to sell.
Profit and loss characteristics: The maximum loss is the premium; the maximum gain occurs when the stock price drops to zero, which is (exercise price - premium). Often used as "insurance" for holding stocks.
4. Selling put options
Operation: collect the premium and assume the obligation to buy assets at the exercise price in the future.
Profit and loss characteristics: The maximum profit is the premium; the maximum loss occurs when the stock price drops to zero, which is (exercise price - premium). Suitable for investors who wish to buy stocks at a discount to the market price.
05 Three ways to handle positions
After holding options, there are three main ways to close the position:
1. Automatic exercise: At expiration, if the option is in-the-money (in-the-money), the broker will usually help you automatically exercise it. It is important to ensure that the account has sufficient funds or securities, otherwise it may result in a default.
2. Early liquidation: Hedging out the original position through reverse trading before expiration. The buyer sells the option directly and the seller buys the same option.
3. Automatic invalidation: At expiration, if the option is out-of-the-money (out-of-the-money), it will automatically be invalidated and the value will return to zero.
06 Practical entry-level suggestions for novices
Step One: Start with Simulation and Minimum Units
Before investing real money, be sure to conduct sufficient simulated trading in the trading software. For your first actual practice, it is recommended to choose an underlying that is familiar to you, has good liquidity, and has a low premium, and only buy 1 call or put option. In this way, the maximum loss is clearly controllable, and experiencing a complete option cycle personally is better than reading ten theoretical articles.
Step 2: Establish a basic risk and capital management framework
Manage your options account like a pancake stand: set a daily loss limit (for example, no more than 2% of your total capital) and strictly enforce it. A layered fund allocation method can be adopted, such as using most of the funds for conservative "rent collection" strategies (such as covered opening), and a small part for directional trading.
Step Three: Continue to learn and remain in awe
Options are expendable assets and time is either your enemy (as a buyer) or your friend (as a seller). Always put risk management first and don't have a "get rich overnight" gambling mentality. There are always opportunities in the market, but only those who survive can seize them.
The door to the options world has been opened, and its core lies in strategic thinking and risk management. Start by understanding this "rights contract" and take the first step in your systematic study.
On April 15th, Netflix will release the final season of "Jelediah" all at once. This drama about the first female lawyer in Italy in the 19th century had almost no discussion on the Chinese Internet in the first two seasons, but its Rotten Tomatoes freshness score is 91%, and the highest single episode on IMDb is 8.7 - a typical "algorithm does not recommend it but everyone who has seen it said it is good".
I checked Netflix's April schedule and found that two of the three returning dramas are old IPs that have been around for many years. Only this Italian original drama has been cut to the end of its third season. Streaming media’s content decisions are never unreasonable, but users’ time ledgers do.
"Jelediah: The Underrated Finale"
The setting of the heroine Lydia Porter is still sharp today: in Turin in 1883, she was the only licensed female lawyer in the city, and her license could be revoked at any time by the male judges on the grounds of "indecentness". The crew researched the life of a real historical figure-Italy's first female lawyer Lidia Poët, but the case arrangement was completely fictitious.
The narrative rhythm of the first two seasons is very "European". A single 50-minute episode tells a complete case, interspersed with the heroine's court battle for the right to practice law. This structure seems luxurious in the era of short videos, but Netflix’s completion rate data clearly supports the renewal decision.
The central conflict of season three has been spoiled in the trailer: Lydia's best friend Grazia is accused of murdering her husband. The screenwriter twists personal friendships and professional ethics into a tight knot - she wants to defend her friend, but all the evidence points to guilt. This old proposition of "procedural justice vs. result justice" takes on a fresh sense of oppression in the 19th century context where gender power was extremely skewed.
The final season only has 6 episodes, and all episodes will be released on April 15th. For viewers who are used to catching up on updates, this is a rare mercy from Netflix.
The other two: Old Faces and New Variables
There are two other dramas returning in the same month, but the original information is limited. Judging from Netflix's scheduling practices, April is usually the window for the platform to clear inventory - the end of Q1 of the fiscal year, and mature IP is needed to stabilize the subscription churn rate. A drama with "high reputation and low traffic" such as "Jelediah" is scheduled to end at this time. There is a high probability that the contract will not be renewed after its expiration, rather than ending naturally.
The content life cycle of streaming media is shortening. In 2019, Netflix was willing to give "The Crown" a six-season budget. Nowadays, a show has a longevity if it lasts for three seasons. It's a blessing that Lydia Potter's story has been told at all - more episodes were axed at the end of season two, leaving an open ending in cyber ruin.
For those who have not followed the show, the total length of 18 episodes just fills two weekends. The threshold for historical dramas has been raised by gender issues, but the reasoning density of the case itself is enough to support genre film lovers. If you are tired of the courtroom roars of American legal dramas, the restraint and gloominess of Italians will be another experience.
After April 15, this drama will enter Netflix’s archive area, and the recommendation algorithm will no longer actively feed it. Content that spreads slowly by word-of-mouth will ultimately not be able to compete with the digital games that played the most in the first week - this is probably the most honest metaphor in the streaming media era.
What’s the most recent drama you’ve watched that was “not recommended by the algorithm but unexpectedly good”?
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