The Plain and Simple Guide to Successful Strategies 10 potx

... potential savings. The disadvantage of this position is that the call buyer may lose the amount paid, 4. Table 1.1 Buying a call XYZ 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 Cost of ... 104 . At 104 the call is paid for by the right to buy pay 100 for XYZ. Above 104 the profit from the call equals the amount gained by XYZ. Between 100 and...

Ngày tải lên: 20/06/2014, 20:20

... 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 began, and after a few brief stops ... per cent. If the demand for these options bids up their price to 10. 5 ($525), while at the same time the price of the underlying and the days until expirat...

Ngày tải lên: 20/06/2014, 20:20

... wish to place the second short strike further from the underlying. If XYZ is at 100 , instead of placing your call ladder at 105 , 110 and 115, you may place it at 105 , 110 and 120. The second spread ... 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...

Ngày tải lên: 20/06/2014, 20:20

... and the 100 105 call spread is worth zero. The cost of the butterfly is then subtracted from 5 to calculate the profit. There are two common risk scenarios. O The first is that at expiration the ... with the long 95 100 105 call butterfly above, if XYZ closes at 108 , both call spreads are worth 5. The profit on the long 95 100 call spread pairs off against the lo...

Ngày tải lên: 20/06/2014, 20:20

... months, and during this time they are exposed to risk. In order to cover their risk, the market-makers need to widen their bid–ask spreads. Under these circumstances, to ask the market-makers to ... wildly, then the options market-makers cannot hedge. In order to cover their risk, they need to widen their markets to correspond to the wide range of the underlyin...

Ngày tải lên: 20/06/2014, 20:20

... 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...

Ngày tải lên: 20/06/2014, 20:20

... at 100 , you would go long the 100 105 box by going long the 100 synthetic and by going short the 105 synthetic. You would buy one 100 call, sell one 100 put, sell one 105 call, and buy one 105 ... XYZ is at 100 , you could sell one 100 call, buy one 100 put, buy one 105 call, and sell one 105 put to create a short box. Here, you are short the 100 synthetic an...

Ngày tải lên: 20/06/2014, 20:20

... Given the following May options on Marks and Spencer, determine the price of the synthetic futures contract and the prices of the missing options. Bear in mind that these are settlements and ... of the following statements true or false? (a) If the implied volatility increases, then the delta and theta of the January 47.50 put will also increase. (b) If the impl...

Ngày tải lên: 20/06/2014, 20:20

... for a specified time period. The put buyer has the right, but not the obligation, to sell the underlying. The put seller has the obligation to buy the underlying at the put buyer’s discretion. Put ... awareness about stock manipulators. The Big Con (2000) by David W. Maurer, Arrow/Random House. Written in the 1930s. Anyone involved in the Bernie Madoff scandal coul...

Ngày tải lên: 20/06/2014, 20:20

... is at 100 , you could buy the 100 call and the 100 put in the same transac- tion. The maximum risk of the spread is its cost, The long straddle is a simultaneous purchase of the at -the- money ... markets The short straddle is the opposite position of the long straddle, i.e. a simultaneous sale of the at -the- money call and put. If XYZ is at 100 , you could...

Ngày tải lên: 21/06/2014, 00:20