: 1. Option is a right. An option contract includes at least a buyer and a seller. The holder enjoys rights, but does not assume corresponding obligations.
2. The object of the option. The subject matter of an option refers to the assets you choose to buy or sell. Including stocks, national debt, currency, stock index, commodity futures and so on. Options are derived from these subject matter, so they are called derivative financial instruments. It is worth noting that the option seller does not necessarily own the underlying assets. Options can be "short". Option buyers may not really want to buy the underlying asset. Therefore, when the option expires, both parties do not have to make physical delivery of the subject matter, but only need to make up the price according to the price difference.
3. Due date. The expiration date of the option agreed by both parties is called "expiration date", and if the option can only be executed on the expiration date, it is called European option; If an option can be exercised at any time on or before the expiration date, it is called an American option.
4. Execution of options. The act of buying and selling the underlying assets according to the option contract is called "execution". The fixed price agreed in the option contract for the option holder to buy and sell the underlying assets is called the "exercise price".
5. Foreign exchange options appeared late. At present, the most important currency options exchange is the Philadelphia Stock Exchange (PHLX), which offers European options and American options contracts in Australian dollars, British pounds, Canadian dollars, euros, Japanese yen and Swiss francs. At present, foreign exchange options transactions are mostly over-the-counter transactions, and some branches of Bank of China have started the "option treasure" business by means of over-the-counter trading of options.