This article comes from the official account: Option Understand

In stock market trading, people often hear a concept called "option doomsday wheel". #期权交易##上证50etf期权##期权日记#

What are the appropriate strategies for end-of-date options contracts?

Buy a call option: If an investor predicts that the market will rise, they can choose to buy a call option. Once the market price rises, investors have the right to buy the underlying asset at a cost lower than the market price, thereby achieving a profit.

Buy a put option: If an investor predicts that the market will fall, they can choose to buy a put option. Once the market price falls, the investor has the right to sell the underlying asset at a price higher than the market price, thereby making a profit.

Option Portfolio Strategy: Investors can choose to buy and sell different types of options or different expiration dates at the same time to form an option portfolio strategy. For example, an investor can choose to buy a call option and sell a put option, thus constructing a "bull spread" strategy. This strategy allows you to make a profit when the market is rising, while also limiting your losses.

Insurance strategy: Investors can hedge their portfolios by purchasing put options as insurance. If the market price falls, the value of the put option rises, thus offsetting the portfolio's losses.

Doom-options double buy strategy

The end-of-date option double buy strategy, also known as the "two-way buy" or "straddle" strategy, is an options trading strategy that involves buying both a call and a put option on the same underlying asset, usually with the same expiration date and strike price. This strategy is suitable for situations where investors expect the market to be volatile, but are unsure of the exact direction.

Market expectations: Investors can use a double-buy strategy when they expect the market to move sharply, but are unsure of the direction of the fluctuations.

Execution price selection: In the double-buy strategy, the strike price of Call and Put is usually the same and close to the current underlying asset price, so as to obtain profits when there is a large fluctuation.

Volatility considerations: The operation basis of the dual buy strategy is high volatility, and the premium paid should be small enough to ensure the cost performance of the strategy.

The doomsday option double buy strategy is a high-risk, high-return strategy that is suitable for experienced investors. Novice investors are not advised to try it lightly without a full understanding of options trading and risk management.

How did the doomsday options market come about?

In trading near the expiration date of an option, the issue of market liquidity may also play a role. When an option is close to expiration, a trader may need to buy or sell the option in order to close the position. If there is a lack of other participants in the market who are willing to make such transactions, this can cause abnormal fluctuations in the price of the option.

In expiration trading, lower volatility tends to be preferred. If you enter an expiration date trade during a period of less volatility, a sharp move in the price of the underlying asset may lead to an increase in volatility, creating additional profit opportunities. However, expiration date trading still comes with a high level of risk, so caution should be exercised when participating.