❗❗❗The option delivery time has reached its maximum pain point. What will happen if the price does not rise to the delivery price?
The option delivery time has arrived. If the underlying asset's price has not risen to the delivery price, investors will face the following main issues:
1: Premium loss: If the investor holds a call option (whether bullish or bearish) and fails to sell it before expiration, they will lose the entire premium paid. This is because the value of the option will rapidly decrease as the expiration date approaches, potentially even reaching zero. The price of the option is mainly determined by its intrinsic value, making the option price more sensitive to fluctuations in the underlying asset's price
2: Automatic exercise risk: For certain option contracts, if the investor fails to close the position before expiration, the option may be automatically exercised. This will force the investor to buy or sell the underlying asset at the exercise price, even if market conditions are not ideal. Automatic exercise may expose investors to unnecessary risks and losses, especially when market trends contradict investor expectations. 3: Liquidity issues: Due to time constraints, there may be very few buyers in the market, leading to insufficient liquidity and difficulty in finding counterparties. This increases the difficulty for investors to sell options and may prevent them from closing positions in a timely manner, resulting in losses. Insufficient liquidity may also lead to significant price fluctuations in the option during the last trading moments, further increasing trading risks.
4: Increased market volatility: The option delivery day is usually accompanied by increased market volatility. A large number of option contracts expire, and investors fulfill their contractual obligations, which may lead to increased trading volume in stocks and thus cause price fluctuations. Especially for those key stock options, their delivery day may become the focus of market attention, thereby affecting stock prices and trading activities#比特币市值排名