Dong Qiangqiang's Story of Leaving Germany

Chapter 183 183. Want to make money?

"Let's talk about the exercise time first." Duanmu put down his Coca-Cola with a proud face, "Most of the options we can buy in the German stock market are European-style options, that is to say, you can only exercise options on the date when the option expires. You can no longer trade the option before it expires or after the option 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 exact exercise time of the option.”

"Then what are the conditions for exercising the rights?" Dong Qiangqiang took out a notebook from his bag, and recorded 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, the stock is now It is 50 marks per share. After the option expires, it will be 50.1 marks per share, which is 0.1 marks higher than when you bought it. Can you exercise in this case? It depends on how your call option defines the triggering conditions That’s right. If your call option only requires that when the option expires, the price of the corresponding stock is higher than 50 marks before it can be exercised, then you can sell it immediately for arbitrage. But if the exercise condition of the option requires that the corresponding stock not only It must be higher than 50 marks, or even higher, for example, if 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 to buy this option is gone? Can't it be held by me like a stock?"

"If it doesn't meet the requirements for exercising rights, then it will just..." Duanmu shook his head, clenched his right hand into a fist and blew with his mouth, and opened his fist at the same time, "It's gone in ashes."

"That is to say, if the exercise conditions of the option are not met, even if I look in the right direction, I may not be able to make money?"

"That's right, your risk is the money you buy options, it may be a huge profit, or it may be cleared."

"Then you are similar to a lottery ticket." Dong Qiangqiang, who understood it, couldn't help complaining.

"This is much better than the return of the lottery," Duanmu further explained, "For example, the most classic 49 lottery in Germany, the probability of winning the jackpot is estimated to be one in 6 or even lower. But many stock option products are made of different Issued by financial institutions, you can choose your most promising purchase from the vast array of option products, such as the ones with less stringent exercise conditions. Of course, the return of this product will generally be lower than that of options with strict exercise conditions. But there are gains and losses, and it depends on your own choice in the end.” He concluded, “High risk and high reward, low risk and low reward, no risk and no reward. This is the case everywhere.”

"Then the call option is to expect the future price of a stock to be higher than the current one? And the 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 it make sense for you then?"

Dong Qiangqiang said thoughtfully: "So although you are still optimistic that Volkswagen's stock price will rise this time, you didn't 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, Union Mortgage Bank, Deutsche Postbank..." Duanmu reported a long String of institution names.

"Why buy so many?" Dong Qiangqiang was very puzzled, "Isn't it almost the same if you buy two?"

"Of course it's different. I have to consider the validity period and exercise conditions of different options, as well as transaction fees."

"Hey, you..." As soon as Dong Qiangqiang was about to speak, he felt the cool air of Coca-Cola hit his nose, and couldn't help but sneezed loudly.

"This is my Portfolio, a portfolio of securities." Duanmu said excitedly, "And this time I put all my savings on it, using a small amount to make a big difference, and four or two to make a big difference."

Dong Qiangqiang was taken aback when he heard that Duanmu had put all his wealth on him, and subconsciously persuaded him: "You'd better be careful, it's too aggressive to be poor and rich. This is not like stocks. If you look in the opposite direction or fail to reach the price stipulated by the option, you will lose all your money.”

"Wealth and wealth are in danger." Duanmu glanced at him disapprovingly, "How is it? You won't suffer if this news gives you a meal, right?"

"It's really worth it." Dong Qiangqiang also had to admit that this product sounds really exciting.He couldn't restrain his strong curiosity, and couldn't help asking, "How much did you buy?"

Duanmu looked around to see if there was no one around, and raised a finger while drinking Coke.

With the experience of guessing wrong for the first time, Dong Qiangqiang already knew that Duanmu had strong financial resources.He was surprised: "10?"

puff.The sip of Coke in Duanmu's mouth was not wasted and sprayed on Dong Qiangqiang's clothes. He was more surprised than Dong Qiangqiang: "What did you say?"

"I asked you if you voted for 10 marks?" Dong Qiangqiang whispered.

"I don't have that much money, so I just invested 1 marks. But if I do it right this time, maybe the profit can reach 10 marks." Duanmu paused, "Would you like to try some? A bullish call option is issued by Commerzbank, the current price is 6 marks, and the exercise time is 6 months later, and the exercise condition is that the stock price of the public must exceed 70 marks by then.”

"70 marks?" Dong Qiangqiang glanced at the TV on the wall, which was broadcasting German financial news, and the real-time DAX index stock price was scrolling under the news, but the stock price of Volkswagen did not appear, "Will 70 Will it be too high?"

"Is the price high? It's not high at all." Duanmu boasted, "I sold it for 66 marks for the first time, and it takes only one hour to get from 66 to 70. The expiration date of this option is at the end of November. Don't you think Can't the share price soar to 11 marks with so much good news?"

"It's because there are still 6 months," Dong Qiangqiang explained, "I feel that there are many variables in it."

"Think about it for yourself. Anyway, I've told you everything I can tell you. Options are indeed riskier than stocks, but they are also more exciting. I definitely want to give it a go."

Dong Qiangqiang's heart is itching to hear what he said, but he is preparing to start a company, and there are too many places where he may spend money.

While eating french fries, he was thinking in his heart: why don't you invest some of the money Dong Yiqing paid back and try it?But how much should I buy?He also has no idea.

*
Dong Yiqing politely sent Galava and Vikas out of the gate. When she turned around and was about to enter the meeting room, she suddenly shouted angrily in German from behind: "Call me your person in charge."

Dong Yiqing turned around quickly, only to see a tall, middle-aged man with blond hair striding into the company's gate.

"Hello! Who are you looking for?" The sister 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 for me." The blond man ignored the words of the sister at the front desk, and strode towards the office area behind.

"Hey, why are you rushing around?" The sister at the front desk hurriedly chased her out of her seat.

(End of this chapter)