On the Cultivation of fortune

I saw the self-cultivation of actors in the king of comedy, and then I want to talk about the wealth cultivation of coders. Here I am not talking about financial management, but more about insurance;
What is insurance? It is a mechanism to deal with unknown risks by paying a small amount of insurance, such as auto insurance, property insurance, and health insurance;
What should I do if I need insurance? Equity Stock! Overseas is a paradise for many high-tech companies to go public. Then many coders can obtain part of the company's equity through various channels, such as salaries and incentives, and withdraw some of them each year, then you can cash in under heavy tax.
There are two major risks: the stock price risk and the exchange rate risk;
This is because the given share price and exchange rate are determined at the time, for example, ￥100 W. At that time, the stock price was $40, the exchange rate was 6.5, and the stock price was granted within five years, after conversion, 770 shares are granted each year,
1) if the stock price remains unchanged, you will pay 5 million yuan a year, 15 million yuan a year, 25 million yuan a year, and 75 thousand yuan a year. (although the tax is heavy, it is acceptable ;)
2) If the share price doubles to $80, you will pay 150 yuan a year, 30 thousand yuan a year, 50 thousand yuan a 5-year tax, and thousand yuan a year. (It is best not to do so ;)
3) if the share price hits $20, you will pay yuan a year, and 40 thousand yuan a year. (even if there is less tax, you still cannot accept it, at this time, your biggest risk is 100 million losses, that is, when the stock price falls to 0, all losses will be lost ;)

When the stock price falls, is there any insurance? The answer is hedging, also known as hedging, which is commonly used by professional players;
When you are granted an equity, you are equivalent to holding a long position in the market, but you cannot sell it for the moment, even if you watch the share price drop, at this time, if you purchase a buy for eight times and expire after one year, the exercise price is $40 of the put option, with 100 shares each, the option price is about 10% of the stock price (mainly the time value). In this example, it is about $4. The total right you need to pay is $3200, about 2 W, with this put option, let's look at the above three situations:
1) if the stock price remains the same, you will pay a tax of 5 million yuan per year, yuan for the right, yuan for the right, and 65 thousand yuan for the 5 year; (less than 10 million ;)
2) If the share price doubles to $80, you will pay 140 yuan in taxes, Yuan in premium, Yuan in taxes in 5 years, and yuan in premium; (less than 10 million ;)
3) if the share price hits $20, you have to pay 2 W of taxes and 2 W of premium each year, but the option price has risen to at least $20 +, at this time, you can sell the options at least to earn more than 8 million yuan, get more than 16 million yuan, pay more than 10 million yuan in 5 years, and get more than 80 million yuan;
Do you understand? When the stock price remains unchanged or increases, the put option will expire. In 2nd) cases, when the option fails, your long position will also rise, in addition, it is very likely that you will lose more than your right. However, when the stock price falls, you will get more than when the stock price remains unchanged;
The premium is equivalent to your insurance. You get the assurance that you will be able to sell the stock at an exercise price a year later. The worst case is that the stock price remains unchanged, at this time, you will lose all your rights, that is, the insurance fee, that is, 100% a year. This number is your biggest risk, not the first;

Some people may think that the price of the option is relatively high. You can also buy the option with a false value. The price will be much cheaper. For example, the option with a false value of 20% is $32, the option price is about 7% of the stock price. In this example, it is $2.8,
1) if the stock price remains the same, you will pay a tax of 5 million yuan per year, 1.5 million yuan for the right, 13.5 million yuan for the 5-year tax, 7.5 million yuan for the right, and 67.5 million yuan for the right; 7.5 less;
2) If the share price doubles to $80, you will pay 1.5 yuan in taxes, 28.5 million yuan in premium, 7.5 million yuan in taxes in 5 years, 142.5 million yuan in premium, and million yuan in cash; 7.5 less;
3) if the share price hits $20, you have to pay 1.5 yuan in taxes and million yuan in royalties each year, but the option price has risen to at least $12 +, at this time, you can sell options at least to earn more than 5 million yuan, get more than 13 million yuan, pay more than 10 million yuan in 5 years, and get more than 65 million yuan;
When the stock price remains unchanged or increases, the loss will be lower. When the stock price falls, the option to view the stock price will earn less, depending on your personal judgment and preference;

The problem here is that you can only lock the earnings at the starting price of $40 in advance, that is, you can only cope with the risk of falling and cannot adapt to the rise, for example, doubling the share price to $80 in the middle, then it fell back to $40. You just temporarily enjoyed the joy and eventually lost all fluctuations in the stock price and the right. Is there a more flexible way to protect the benefits during the rise?
Of course, there is a feasible way: At the beginning, for all positions, buy a $40 bid option. When the stock price rises to $50, you sell a $40 bid option, at the same time, you can buy a bid option of $50. When the stock price rises to $60, you sell a bid option of $50 and a bid of $60; when the stock price rises to $70, you sell the $60 drop option and buy the $70 drop option...
When the stock price rises to more than $80, you have a put option in your hand, which can lock you for the vast majority of the benefits, about 40 W, you only pay the right of four put options: $40, $50, $60, $70. The sum is less than 10 W, and your minimum value is 30 W +, if you do not do anything, you will get yuan;

Finally, assuming that the exchange rate remains unchanged, the exchange rate also has great risks. For example, if the exchange rate is 7 at the time of granting, the exchange rate is 6 at the time of appreciation in the middle, and the exchange rate is 6 at the time of selling, you will lose 15% of your earnings, however, the solution is the same. It is still insurance and hedging!

On the Cultivation of fortune