"Let's talk about the exercise time first." Duanmu put down the Coke with a proud look on his face, "Most of the options we can buy in the German stock market are European options, which means that you can only exercise the option on the expiration date of the option. You can no longer trade the option before it expires or after it expires. The start and end dates of the option are marked on each option you buy, which is equivalent to telling you the validity period and the accurate exercise time of the option."
"What are the conditions for exercising the rights?" Dong Qiangqiang took out a notebook from his bag and took notes on what Duanmu said while listening and eating.
"Each option has a condition that triggers exercise, that is, under what circumstances you can sell the option to make a profit. For example, if you buy a call option corresponding to a certain stock with a validity period of 6 months, now the stock It is 50 marks per share. After the option expires, it will be 501 marks per share, which is 01 marks higher than when you bought it. Can you exercise the option in this case? It depends on how your call option defines the conditions that trigger the exercise. Yes. If your call option only requires that when the option expires, the corresponding stock price can be exercised if the price of the corresponding stock is higher than 50 marks, then you can sell it immediately for arbitrage. But if the exercise conditions of the option require that the corresponding stock not only It must be higher than 50 marks, or even higher. For example, if the option cannot be exercised until it is higher than 70 marks (including 70 marks), then your call option will become a piece of waste paper and cannot be traded.”
"Waste paper?" Dong Qiangqiang stopped writing, "Then the money I spent when buying this option is gone? Can't it be held by me forever like a stock?"
"If it fails to meet the exercise requirements, then it will..." Duanmu shook his head, clenched his right hand into a fist and blew with his mouth. While blowing, he opened his fist again, "It will turn into ashes and disappear."
"In other words, if the exercise conditions of the option are not met, I may not make money even if I look in the right direction?"
"That's right, your risk is the money you spend buying options. It may make a huge profit or it may be wiped out."
"Then yours is almost the same as a lottery ticket." Dong Qiangqiang, who understood, couldn't help complaining.
"This is much better than the return from lottery tickets," Duanmu further explained. "For example, the probability of winning the jackpot in Germany's most classic 49-pick-6 lottery is estimated to be one billionth or even lower. But many stock option products are composed of different Issued by financial institutions, you can choose your most promising options from a vast array of option products, such as those with less stringent exercise conditions. Of course, the returns of such products will generally be lower than those with strict exercise conditions. But there are gains and losses, and in the end it all depends on your own choice." He concluded, "High risk and high reward, low risk and low reward, no risk and no reward. This is true everywhere."
"So a call option is the expectation that a stock's future price will be higher than it is now, right? And a put option is just the opposite?"
"Yes. A put option is an expectation that the price of a certain stock will fall in the future." Duanmu stuffed the last few French fries into his mouth, "Does this make it easier for you to understand?"
Dong Qiangqiang said thoughtfully: "So although you are still optimistic that Volkswagen's stock price will rise this time, you did not buy all the stocks like last time, but bought part of the call options."
"Of course, and I also bought call options issued by different financial institutions, such as Deutsche Bank, Commerzbank, Dresdner Bank, Deutsche Bundesbank, Deutsche Postbank..." Duanmu reported a long article carefully. string of organization names.
"Why buy so many?" Dong Qiangqiang was very puzzled, "Isn't it enough to just buy two?"
"Of course it's different. I have to consider the validity periods and exercise conditions of different options, as well as transaction fees."
"Good boy, you..." Just as Dong Qiangqiang was about to speak, he felt the cold air of cola hit his nose, and he couldn't help but sneeze loudly.
"This is my prtfli, a portfolio of securities." Duanmu said excitedly, "And this time I put all my savings into it, using a small amount to make a big difference."
Dong Qiangqiang was surprised when he heard that Duanmu had put all his wealth on the market. He subconsciously advised: "You'd better be careful. It's too radical to be poor and rich. This is not like a stock. If the stock price falls, you will be stuck at most. If you look in the opposite direction or the price does not reach the price specified by the option at expiration, you will lose all your money.”
"Wealth can be gained through danger," Duanmu glanced at him disapprovingly, "How about it? You won't suffer a loss if this news gives you a meal, right?"
"It's really worth it." Dong Qiangqiang also had to admit that this product sounded really exciting. He couldn't restrain his strong curiosity and couldn't help asking: "How much did you buy it for?"
Duanmu looked around and saw that no one was around, and raised a finger while drinking Coke.
Having guessed wrong for the first time, Dong Qiangqiang already knew that Duanmu had strong financial resources. He was surprised: "100,000?"
puff. Duanmu's mouthful of coke wasted no time and sprayed onto Dong Qiangqiang's clothes. He was even more surprised than Dong Qiangqiang: "What did you say?"
"I asked you if you invested 100,000 marks?" Dong Qiangqiang whispered.
"I don't have that much money, so I invested 10,000 marks. But if I do it right this time, maybe the income can reach 100,000 marks." Duanmu paused, "Would you like to try some too? I would like to One of the promising call options was issued by Commerzbank, with a current price of 6 marks, and the exercise time is 6 months later. The exercise condition is that the Volkswagen stock price must exceed 70 marks by then."
"70 marks?" Dong Qiangqiang glanced at the TV on the wall. German financial news was being broadcast on the TV. The real-time DA index stock price was scrolling below the news, but the stock price of Volkswagen did not appear. "Will 70 mark?" Would it be too high?”
"Is this price high? It's not high at all." Duanmu boasted, "The first time I sold it was 66 marks, and it only took one hour from 66 to 70. The expiration date of this option is the end of November, don't you think Even with so much good news, can’t its stock price soar to 70 marks?”
"It's because there are still 6 months left," Dong Qiangqiang explained, "that's why I feel there are so many variables here."
"You think about it yourself. Anyway, I've told you everything I can tell you. Options are indeed higher risk than stocks, but they are also more exciting. I will definitely give it a try."
Dong Qiangqiang was also itchy by what he said, but he was preparing to start a company, and there were too many places where he might have to spend money.
While eating French fries, he was thinking in his mind: How about investing some of the money Dong Yiqing returned first and try it? But how much should I buy? He has no idea either.
Dong Yiqing politely sent Galawa and Vikas out of the door. When she turned around to enter the conference room, a voice in German suddenly came from behind: "Call your person in charge."
Dong Yiqing turned around quickly and saw a tall, blond, middle-aged man striding into the company door.
"Hello! Who are you looking for?" the girl at the front desk asked politely.
"I'm looking for the person in charge of this company, Zhang Yingfei." The visitor said loudly, "Tell him to come out and see me quickly."
"Sorry, Vice President Zhang Yingfei is not in the company right now. If you make an appointment with him..."
"Zhang Yingfei, come out." The blond man ignored the words of the sister at the front desk and strode towards the office area at the back.
"Hey, why are you so intrusive?" The girl at the front desk hurriedly chased her out of her seat.
