Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition 5 ppt

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_2 docx

... CloseSP100 Apr 53 0 p 2434 7721 . 25 .1 25 .1 25 −.06 25 633 .55 SP100 Apr 56 5 p 1724 54 49 .8 75 . 25 .31 25 −.81 25 633 .55 SP100 Apr 57 0 p 2232 10406 1.06 25 .3 75 .43 75 −.81 25 633 .55 The rows are for the prices ... into account transaction costs and 7060 50 403020 Profit 10–100 25 30 35 40 45 50 55 60 65 Price of Underlying Instrument70 75 80 85 90 95 100 1 05 110 1 15 120Break-even pointFIGURE 3.6 ... time, and volatility on the price of an option. The most common charts show the7060 50 403020 Profit 10–100 25 30 35 40 45 50 55 60 65 Price of Underlying Instrument at Expiration70 75 80 85...

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_3 pptx

... Count= 52 WHY AND HOW OPTION PRICES MOVETABLE 4.8 Theoretical PricesImplied VolatilitiesStrike 20% 30% 40% 35 15. 12 15. 12 15. 1340 10. 15 10.17 10.26 45 5. 25 5 .50 5. 90 50 1.43 2.08 2.74 55 0.13 ... toexpire 45 50 55 60 0.1191 0 .54 66 0.8997 50 0.0944 0 .54 27 0.91 65 40 0.0677 0 .53 84 0.936030 0.0399 0 .53 34 0. 958 220 0.0146 0 .52 74 0.981310 0.0009 0 .51 95 0.9978c03 JWBK147-Smith April 25, 2008 ... 53 .62 0.080 −9.93 6 .56 2.71 55 0 .51 19.28 0.060 −6 .55 4 .53 1.0060 0.08 4.07 0.020 −2. 05 1.44 0.21 65 0.01 0 .54 0.003 −0.36 0.26 0.03c04 JWBK147-Smith May 8, 2008 9:48 Char Count=Advanced Option...

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_5 ppt

... JWBK147-Smith May 8, 2008 9 :56 Char Count=92 OPTION STRATEGIES 7Price of Underlying Instrument Profit 643 5 21−1−2−304041424344 45 46474849 50 51 53 54 55 56 57 58 59 60 52 FIGURE 7.1 Buy ... expiration. For example, assume you boughtOEX 58 0 options at 12 and the OEX was at 57 5. If the option expires and c06 JWBK147-Smith May 8, 2008 9 :52 Char Count=84 OPTION STRATEGIES FIGURE 6 .5 IBM ... three. For example, assumeyou bought an OEX 55 0 call at 5, it currently trades at 15, and the OEX 57 0calls are trading for 3. You could liquidate the OEX 55 0s, take the 10-pointproﬁt, and invest...

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_6 potx

... 2008 10:3 Char Count=116 OPTION STRATEGIES 3Price of Underlying Instrument Profit 20−11−2−3 5 −6−7−44041424344 45 46474849 50 51 53 54 55 56 57 58 59 60 52 FIGURE 9.1 Naked Call ... Count=104 BUY A PUT7Price of Underlying Instrument Profit 643 5 21−1−2−304041424344 45 46474849 50 51 53 54 55 56 57 58 59 60 52 FIGURE 8.1 Buy a PutHowever, some investors will ... three. For example, assumeyou bought an OEX 55 0 put at 5, it currently trades at 15, and the OEX 53 0calls are trading for 3. You could liquidate the OEX 55 0s, take the 10-pointproﬁt, and invest...

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_9 doc

... 2008 10:8 Char Count=176 OPTION STRATEGIES 10Price of Underlying Instrument Profit 84260−2−6−8−10−44041424344 45 46474849 50 51 53 54 55 56 57 58 59 60 52 FIGURE 14.1 Ratio Covered ... STRATEGIES 3 Profit 210−1−2−3Price of Underlying Instrument4041424344 45 46474849 50 51 53 54 55 56 57 58 59 60 52 FIGURE 15. 1 Bull SpreadNote the caveat of being only moderately bullish. This ... contracts of the S&P 50 0 put options with a strikeof 55 0 and a delta of 0 .50 . If the price of the S&P 50 0 drops to 54 0, the deltaof the options will climb to, say, 0 .55 . Thus, you will be...

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_10 docx

... 8, 2008 10:14 Char Count=198 OPTION STRATEGIES 3 Profit 210−1−2−3Price of Underlying Instrument40414243444146474849 50 51 53 54 55 56 57 58 59 60 52 FIGURE 16.1 Bear SpreadNote ... a neutral market bias.2Price of Underlying Instrument Profit −2−3−11−404041424344 45 46474849 50 51 52 53 54 55 56 57 58 59 60FIGURE 17.2 Short Butterﬂyc17 JWBK147-Smith May 8, ... spread 52 0 −1/4−23/8 52 5 +43/4+2 5 /8 53 0 −1/4+2 5 /8However, the market has dropped to 52 5, you have switched to the bullcamp, and prices are now:OEX = 52 5December 52 0 call...

Profit Making Techniques for Commodity Options 2nd Edition_2 pptx

... 2008 10:3 Char Count=116 OPTION STRATEGIES 3Price of Underlying Instrument Profit 20−11−2−3 5 −6−7−44041424344 45 46474849 50 51 53 54 55 56 57 58 59 60 52 FIGURE 9.1 Naked Call ... Count=104 BUY A PUT7Price of Underlying Instrument Profit 643 5 21−1−2−304041424344 45 46474849 50 51 53 54 55 56 57 58 59 60 52 FIGURE 8.1 Buy a PutHowever, some investors will ... initial investment For example, if you buy an IBM put option for 5 and sell it for 71/2 ,for a proﬁt of 21/2, your return on investment is 50 percent (21/2÷ 5 = 0 .50 ,or 50 percent). Annualizing...

Profit Making Techniques for Commodity Options 2nd Edition_3 pdf

... 2008 10:4 Char Count=126 OPTION STRATEGIES 3Price of Underlying Instrument Profit 20−11−2−3 5 −6−7−44041424344 45 46474849 50 51 53 54 55 56 57 58 59 60 52 FIGURE 10.1 Covered ... con-vertible preferreds and warrants are also candidates.c10 JWBK147-Smith May 8, 2008 10:4 Char Count=136 OPTION STRATEGIES − 35 −30− 25 −20140 1 45 150 155 160 1 65 170 1 75 180 1 85 190−10 Profit DECISION ... are short. For example, you are long 100 contracts of the S&P 50 0 futures con-tract at 55 0 and short 200 contracts of the S&P 50 0 options with a strike of 55 0 and a delta of 0 .50 . If the...

Profit Making Techniques for Commodity Options 2nd Edition_5 pdf

... contracts of the S&P 50 0 put options with a strikeof 55 0 and a delta of 0 .50 . If the price of the S&P 50 0 drops to 54 0, the deltaof the options will climb to, say, 0 .55 . Thus, you will be ... write options c14 JWBK147-Smith May 8, 2008 10:8 Char Count=176 OPTION STRATEGIES 10Price of Underlying Instrument Profit 84260−2−6−8−10−44041424344 45 46474849 50 51 53 54 55 56 57 58 59 60 52 FIGURE ... STRATEGIES 3 Profit 210−1−2−3Price of Underlying Instrument4041424344 45 46474849 50 51 53 54 55 56 57 58 59 60 52 FIGURE 15. 1 Bull SpreadNote the caveat of being only moderately bullish. This...

Profit Making Techniques for Commodity Options 2nd Edition_10 potx

... 31FLEX options, 11Foreign exchange options: interest rates and, 28Phi and, 48–49Forward price, 61Futures contracts, 11, 42, 129, 1 65 Gamma:deﬁned, 24– 25 option strategy description and, 49 53 price ... 154 – 157 rationale for, 151 – 152 risk/reward and, 153 – 154 Near-term/short-term option, 12Net investment required:bear spreads, 198–199bull spreads, 184–1 85 buying a call, 93buying a put, 1 05 calendar ... 273Delta:deﬁned, 24– 25 expected return and, 36 option strategy description and, 49 53 price sensitivity and, 46–47Delta-neutral strategy, 52 , 53 57 naked put writing, 156 ratio calendar spreads,...

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