(Hello, fellow coin friends, welcome to follow the #Learn a little bit about options every day# series of courses in Binghuodao Community. I will take you to learn about options knowledge and exchange practical strategies. Welcome to leave a message to interact and make progress together.)
1. A contract that transcends time and space: the “prototype of options” 3,000 years ago
Hello everyone! Today we are going to talk about the option story, which starts with an ancient olive oil press.
In 600 BC, the ancient Greek philosopher Thales did something that shocked the whole village: he rented all the olive oil presses in Miletus in advance. No one understood why he did this at the time - until that year when the olive harvest was great and the demand for oil pressing soared, Thales rented out the oil presses at a high price and made a fortune.
This is the earliest "option thinking" of mankind:
Rights, not obligations: Taylor's rights (paying rent to lock in usage rights)
Leverage effect: controlling large resources with small costs
Risk hedging: Avoid the risk of oil press price increase during the harvest season
This story hides the core logic of options: using an affordable cost to exchange for a certain possibility in the future. It is like you spend 10 yuan to buy a lottery ticket, betting on the right to "win the prize" - except that options trading is not based on luck, but on rational judgment of market changes.
2. From the field to the exchange: the "wild growth history" of options
1. 17th Century Netherlands: Crazy Tulip Options
During the Dutch tulip bubble in 1637, flower merchants invented the "buy option": flower farmers paid a deposit to lock in the future purchase price. When the price of tulips rose to an outrageous level, those who held the option only needed to pay the deposit to buy the goods at a low price and then resell them to make a profit. But after the bubble burst, countless people refused to fulfill their contracts, leading to the first "option default wave" in history.
Lesson: Options are a double-edged sword. Not understanding the rules can backfire.
2. Chicago, 1848: The Birth of Modern Options
After the establishment of the Chicago Board of Trade (CBOT), farmers began to use "forward contracts" to lock in grain prices. But it was in 1973 that options became standardized, when the Chicago Board Options Exchange (CBOE) was established, which did three major things:
Launch standardized contracts (like unifying mobile phone charging ports into Type-C)
Introducing a market maker system (ensuring that there are always people buying and selling)
Release of the Black-Scholes pricing model (to put a price on options)
Since then, options have been upgraded from "private betting agreements" to formal financial instruments, and the average daily trading volume has skyrocketed from 911 contracts per day to the current tens of millions.
3. Options in China: From “Imported Products” to Localization
1992: China's first warrant, the "Baoan Warrant", was listed. However, even securities firms did not understand how to trade it at the time, and there was an anecdote that the sales department manager had to manually calculate the price with a calculator.
2015: SSE 50ETF options were listed, and China entered the era of standardized options. The regulators specially designed a "circuit breaker mechanism + position limit system", just like an "assisted driving system" for new drivers, to prevent drastic market fluctuations.
2023: The total market options trading volume exceeds 5 billion, covering stock indexes, commodities, and ETFs. Now even the aunties in the vegetable market know to "buy put options to prevent a sharp drop" - although they may call it a "stock insurance policy."
4. Why do you need to know something about the history of options?
Breaking the mystery: Options are not a "magic" invented by Wall Street, but the crystallization of thousands of years of human business wisdom
Understand the essence: All complex strategies are derived from the basic logic of "spending little money to control a large warehouse"
Beware of risks: All option disasters in history (such as the bankruptcy of Long-Term Capital Management) began with disregard for the rules.
For example:
Suppose you want to buy a school district house but don't have enough money, you can pay a deposit of 200,000 to lock in a total price of 5 million in one year - this is a "call option". If the house price rises to 6 million, you make 1 million (you only need to pay the balance of 4.8 million); if it falls to 4.5 million, you will lose at most 200,000 in deposit. Options are the "right to choose" in real life!
5. Next Issue Preview
Tomorrow we will unlock the "Financial Derivatives Family Chart" and introduce you to the "relatives" of options: futures, swaps, and warrants.
After-class task: Observe the "option thinking" in life - such as the Double 11 deposit pre-sale and movie ticket refund and change policies, leave a message to share your discoveries!
