How Do I Exercise Stock Options?

Stock options: Options refer to the power that can be bought and sold in a certain period of time in the future. The buyer owns a certain amount of money (referred to as a premium) to the seller and owns it within a period of time (referred to as American options) or a specific future date (referred to European option) has the right to purchase or sell a certain amount of a specific subject matter from the seller at a predetermined price (referring to the exercise price), but does not bear the obligation to buy or sell. Options trading is in fact a trading of such rights. The buyer has the right to execute and the right not to execute, and it is entirely flexible. Options are divided into over-the-counter options and over-the-counter options. Over-the-counter options transactions are generally reached by both parties to the transaction.

Stock option exercise

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American

Securities payment settlement method: refers to

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Investment application: Take the call warrant as an example, if the price of the warrant is 1 yuan, the exercise price is 6 yuan, and if the stock price on the exercise date is 10 yuan, the investor can use 7 yuan (the price of the warrant + the exercise price) (Price) to buy a stock with a market value of 10 yuan and get a profit of 3 yuan (regardless of transaction costs). American options (warrants) can be exercised on any day during the exercise period, while European options (warrants) can only be exercised on the agreed exercise date. Whether the investor finally decides to exercise the stock depends on the fluctuation of the stock price and the price of the warrant. Loss.