The Design Of The Scheme For Stopping Loss Of Crude Oil Option Based On The Incident Of Middle Oil

With the increasing trend of economic and financial globalization,and the acceleration of international financial capital flows and driving forces,the financial derivatives market has developed rapidly.As an important means of risk management,financial derivatives become more and more prominent with the development of financial liberalization and innovation.And the derivatives business has increasingly become an indispensable core component of the financial market system.However financial derivatives is a double-edged sword,the development of international financial markets has also brought about a series of crises and disturbances that shook the world financial system.In 1995 Bahrain bank,an established European Bank,went bankrupt after losing billions of dollars in illegal speculation.In 1997,international financial speculators led by Mr.Suoluosi used hedge funds with derivatives as their main component to snipe at Asian financial markets,causing the Asian financial crisis to hit many economies around the world.On November 30,2004,an overseas state-owned company named CNOOC which had increased its assets 800 times in five years,filed for bankruptcy in just a few months,because of the miscalculation of the oil price,eventually causing a heavy toll on itself and the economy.Such shocking cases and events are the result of lacking awareness of risks of derivatives trading.Financial derivatives originally designed to avoid financial risks and discov-er price.It plays an inestimable role to promote the development of financial ma-rket.However,the risk itself has a significant amplification,if not properly oper-ated,it is easy to cause huge risk economic losses.In this paper,we first review and anal yze the cause of the incident,then based on the idea of hedging,we use linear regression method to find the hedging position.On this basement,we desi-gn a set of risk hedging scheme,which can avoid risk and reduce loss in the opti-on mark-ets.Finally,it is hoped that the CNAC incident and the stop-loss sche-sme based on it will give some enlightenment and reference to the large number of small and medium-sized enterprises and individual investors under the backgr-ound trend of crude oil futures.