How to understand options? for example
Iphone15 is about to be launched, with an official price of 10,000 yuan per unit.
Xiao Ming is so strapped for money that he cannot afford an iPhone 15 until his salary is paid on the 25th of next month. However, iPhone 15 is in short supply, and the price of buying it keeps changing.
So he found the mobile phone seller Lao Zhang, gave him a 500 yuan deposit, and signed an agreement to sell it to him on September 25 at a price of 10,500 yuan/unit.
In the blink of an eye, on September 25, the market price of the mobile phone was 12,000 yuan/unit, but Xiao Ming bought an iPhone 15 from Lao Zhang for 10,500 yuan/unit as agreed.
If the price drops to 9,000 yuan/unit, Xiao Ming can give up the 500 yuan deposit and not buy the mobile phone from Lao Zhang.
Theoretical explanation:
The agreement signed by Xiao Ming and Lao Zhang is the option
500 yuan is the option fee
10,500 yuan/unit is the exercise price
September 25th is the exercise time
The rights may or may not be exercised upon expiration.
