Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition 10 docx

... something, which could be: 1. A stock, like 100 shares of Citibank stock. (Note that options on stocks are always for 100 shares of the underlying stock. Options on futures are for the same quantity as ... 4.375 for an option on a stock means the total price for the option is 100 times the cost-per-share of the option, or $437.50. Quotations for options on Treasu...

Ngày tải lên: 20/06/2014, 20:20

... in foreign interest rates. This is only used in foreign exchange options. It has no impact on any other options. Foreign exchange options are affected by phi because options are priced on the forward ... 4 .10 again, assume that these are options on the Widget Stock Index (the index of stocks in the widget industry). The price of the underlying index is $50 when the trade sta...

Ngày tải lên: 20/06/2014, 20:20

... are trading for $4 and the out-of-the-money options are trading for $2. This means that you could have twice as many of the out-of-the-money options as you could of the at-the-money options. This ... far options is much greater than near options, and you will be able to profit handsomely if the implied volatility moves significantly higher. The final consideration is liquidity. F...

Ngày tải lên: 20/06/2014, 20:20

... are trading for $4 and the out-of-the-money options are trading for $2. This means that you could have twice as many of the out-of-the-money options as you could of the at-the-money options. This ... OEX stock index against a portfolio of stocks that mimic the OEX. (The OEX is an index composed of 100 large NYSE stocks. It is possible to mimic the index by buying all the s...

Ngày tải lên: 20/06/2014, 20:20

... out- of-the-money options is greater than the at-the-money options. You can sell the out-of-the-money options and buy the at-the-money options, expecting the volatility skew to go away or to be reduced. For ... follow-up strategies. ) The point to remember is that you will need more out-of-the-money options to cre- ate a delta-neutral position than in-the-money or at-the-money o...

Ngày tải lên: 20/06/2014, 20:20

... could c15 JWBK147-Smith May 8, 2008 10: 13 Char Count= c17 JWBK147-Smith May 8, 2008 10: 17 Char Count= 210 OPTION STRATEGIES 4 Price of Underlying Instrument Profit 0 −1 1 3 −2 2 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 FIGURE ... potential profit than with other option strategies. Be sure to consider the cost of commis- sions before selecting a bear spread...

Ngày tải lên: 20/06/2014, 20:20

... are trading for $4 and the out-of-the-money options are trading for $2. This means that you could have twice as many of the out-of-the-money options as you could of the at-the-money options. This ... 2008 10: 0 Char Count= Buy a Put 105 The price of the UI must drop by some amount before expiration for you to make any money at expiration. For example, assume you bought OEX 1...

Ngày tải lên: 21/06/2014, 12:20

... out-of-the-money options is greater than the at-the-money options. You can sell the out-of-the-money options and buy the at-the-money options, expecting the volatility skew to go away or to be reduced. For ... stock $196,950 + Stock commissions +1,300 − Options premium received −5,688 + Options commissions +390 Net investment required $192,952 Example 10. 2 Return-if-exerc...

Ngày tải lên: 21/06/2014, 12:20

... out- of-the-money options is greater than the at-the-money options. You can sell the out-of-the-money options and buy the at-the-money options, expecting the volatility skew to go away or to be reduced. For ... preference should be to write options c14 JWBK147-Smith May 8, 2008 10: 8 Char Count= 176 OPTION STRATEGIES 10 Price of Underlying Instrument Profit 8 4 2 6 0 −2 −...

Ngày tải lên: 21/06/2014, 12:20

... 91 101 decision structure, 94 101 rationale for, 91 risk/reward and, 92–94, 97–98 Buying a put strategy, 103 –113 decision structure, 106 –113 rationale for, 103 risk/reward and, 104 106 Calendar spreads, ... 31 FLEX options, 11 Foreign exchange options: interest rates and, 28 Phi and, 48–49 Forward price, 61 Futures contracts, 11, 42, 129, 165 Gamma: defined, 24–25 option s...

Ngày tải lên: 21/06/2014, 12:20