Excursus: What is the subscription ratio for options?

As a definition for options, it can be stated quite simply that it is a right to sell a certain security at a predetermined time and price.

From the difference between the underlying and the price development, a profit can be made with the options in futures transactions both through the rise and fall of the price.

The subscription ratio for options means that a certain number of shares of the underlying asset are securitised by an option. Since the strike price of the option is given per share and does not refer to the subscription ratio, the strike must be multiplied by the quantity of all shares in the option contract. In this way, the effect of leverage in options can be estimated.

The total volume of the option contract can therefore be calculated in this way:

As an example, we can say that the strike for the option on a share costs 25 euros. However, if the strike ratio is 1:100, the total volume of the option contract is not 25 euros, but 2500 euros.

How do I calculate the subscription ratio of shares?

First of all, you have to determine the value of the capital increase. The public limited company provides information on this. You can use either the number of shares or the nominal value, and you have to make up the difference between the new share capital and the increase. The number or value of the old shares is then divided by the new shares. So the formula here is:

The numbers are thereby broken down to a minimum. A ratio of 500 to 100 million euros thus results in a subscription ratio of 5:1 - the old shareholders must own five shares to buy one new share.

Spread

By definition, the spread in sg-exness.com/exness-accounts is the difference between the bid price and the ask price, recognisable at the broker by the two different prices for buying and selling securities. You subtract the former from the latter to get the spread in Euro, USD etc.. If this is 0.0002, for example, the spread is 2 pips.

To register, simply click on "Set up account" on the start page. Here you enter your personal information such as name, address and telephone number. You should also state your experience in financial trading.

Conclusion

In the case of a capital increase on the stock exchange, the subscription right is distributed to the old shareholders in a certain subscription ratio. The ratio results from the relation of the old share capital to the capital increase. If, for example, an AG increases its capital from 100 million euros to 110 million euros, the subscription ratio is 10:1.

In this example, the existing shareholder needs ten previous shares in his possession in order to receive a subscription right to one share. Thus, he can maintain his relative share in the company even after the capital increase. On the other hand, there is no obligation to exercise the subscription right and purchase new shares. The options can be sold within a certain period of time.

In addition, subscription ratios also refer to warrants in the sense of futures contracts. In this way, the leverage effect and the difference between the underlying and the price development can be used to make a profit.