The Plain and Simple Guide to Successful Strategies 8 doc
The Financial Times Guide to Options: The Plain and Simple Guide to Successful Strategies (2nd Edition) (Financial Times Guides)_2 pptx
... one -to- one with the stock. Below 18. 00, your
call expires worthless. Between 18. 00 and 18. 58 you take a partial loss,
equal to the stock price minus the strike price minus the cost of the call.
Table ... would lose one -to- one with the stock. Below 18. 00
you would collect 0. 58. Between 18. 00 and 18. 58 you would have a profit
equal to the strike price minu...
The Financial Times Guide to Options: The Plain and Simple Guide to Successful Strategies (2nd Edition) (Financial Times Guides)_3 pot
... to 22
1
/
2
; the 380 put then moves down by
1
/
2
point, to 21
1
/
2
. If the December futures contract moves down by 1 point,
then the 380 call moves to 21
1
/
2
and the 380 put moves to ... options theory takes a back seat. I went to the floor and
wedged my way into the crowd, and I waited, knowing that I was covered.
The bell sounded and the shouting...
The Financial Times Guide to Options: The Plain and Simple Guide to Successful Strategies (2nd Edition) (Financial Times Guides)_5 doc
... 115, then the solution is
to buy one 120 call. Likewise, if the ladder is long one 95 put, short one
90 put and short one 85 put, and if XYZ suddenly breaks to 85 , then the
solution is to buy ... know about theory.) Then together we
devised trade recommendations which the brokers passed on to their
clients.
The clients did well. One of them took one of our recomme...
The Financial Times Guide to Options: The Plain and Simple Guide to Successful Strategies (2nd Edition) (Financial Times Guides)_7 doc
... 5. The profit on the long 95–100 call spread pairs off against
the loss on the short 100–105 call spread. The butterfly is then worth-
less, and the cost of the butterfly is taken as a loss.
There ... with the butterfly
There are other risks with the butterfly. The first is pin risk, which is
unlikely, but possible. The two short strikes may expire at -the- money. It...
The Financial Times Guide to Options: The Plain and Simple Guide to Successful Strategies (2nd Edition) (Financial Times Guides)_9 potx
... 126 2.26 8. 59 0.77 0.25 8. 68 0.23
127 1.44 8. 44 0.65 0.42 8. 42 0.35
*1 28 1.05 8. 14 0.51 1.04 8. 26 0.49
129 0.43 8. 30 0.36 1.41 8. 32 0.63
130 0.25 8. 40 0.24 2.23 8. 46 0.75
131 0.13 8. 38 0.14
... 42.59
480 0.31 38. 71
490 0.44 37.19
500 0.50 34.46
515 0 .81 31.92
545 2.00 25. 98
550 2. 38 25.06
555 2.75 23.90
570 4.50 20.56
575 21.00 20.75
580 17.13 19.60 6.75...
The Financial Times Guide to Options: The Plain and Simple Guide to Successful Strategies (2nd Edition) (Financial Times Guides)_10 ppt
... on the other hand, you sell the call at 34.40 and pay 33.70 for the put,
then you have sold the synthetic future at 1140.70. Here, you have the
obligation to sell the future above 1140, and the ... Futures, synthetics and put–call parity 223
On the other hand, the holder of the long futures position forgoes the
dividends payable for the next six weeks, and...
The Financial Times Guide to Options: The Plain and Simple Guide to Successful Strategies (2nd Edition) (Financial Times Guides)_11 pot
...
2 48 Questions and answers
Chapter 1 answers
1 (a) 19. 18
(b) unlimited
(c) 0. 18
(d) 19. 18, 0. 18, unlimited
(e) $ 18
(f)
(g)
(h)
–0. 18
2
1.5
1
0.5
0
–0.5
18
18. 5
–0. 18 –0. 18
0.32
0 .82
1.32
1 .82
19
19.5 ... them
close to expiration in order to clear options off
our books and to avoid pin risk. But then again,
the arbs try to pay 19.75 for the above box...
The Financial Times Guide to Options: The Plain and Simple Guide to Successful Strategies (2nd Edition) (Financial Times Guides)_13 docx
... Questions and answers
iii) 285 0 – 3 .8 = 284 6.2
iv) 2750 + 3 .8 = 2753 .8
v) 284 6.2 – 2753 .8 = 92.4 points
vi) 3 .8
(b) i) 107 + 54.5 – 85 .8 – 68. 4 = 7.3
ii) ( 285 0 – 280 0) = 42.7
iii) 285 0 – 7.3 = 284 2.7
iv) ... range of the condor is
therefore 84 p greater.
2 (a) i) 107 + 68. 40 – (2 × 85 .80 ) = 3 .8
ii) ( 285 0 – 280 0) – 3 .8 = 46.2
288 Questions and a...
The Financial Times Guide to Options: The Plain and Simple Guide to Successful Strategies (2nd Edition) (Financial Times Guides)_14 doc
... 306
fixed amount to invest
conclusions 181
delta price ratio 177 8, 181 , 306
theta price ratio 1 78 9, 181 , 3 08
two approaches 181
vega price ratio 179 81 , 309
Glossary 307
Time decay The decline ... strangle 1 18
price ratio 1 78 9, 181
short strangle 1 18
time and 165–9
use and abuse of 59–61
time decay 27 8, 309
delta 49–50, 306
gamma 54, 307
short strangle 1...
The Plain and Simple Guide to Successful Strategies_1 pdf
... put, and you will be obli-
gated to buy the stock at the strike price, or 45. The cost of your stock
purchase will be effectively reduced by the credit of the spread. For exam-
ple, if the stock ... a put 1×2. He began to cover their risk by selling futures. Then the
other players in the market needed to sell futures in order to cover their
risk. The market went...