Profit Making Techniques for Commodity Options 2nd Edition 10 potx

... 8, 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 180 options at ... costs for margin trades will be more than for cash trades. The carrying cost for a cash transaction will only be the opportunity cost. Carrying costs for trades on margin include t...

Ngày tải lên: 21/06/2014, 12:20

... criterion for determining if you should roll forward is the return per day. However, it is only applicable for rolling forward into the same strike price. For example, you may be able to make $435 for ... buyer. c10 JWBK147-Smith May 8, 2008 10: 4 Char Count= Covered Call Writing 139 −40 −30 −20 160 165 170 175 180 185 190 195 200 205 210 215 220 225 230 10 0 10 20 30 Original R...

Ngày tải lên: 21/06/2014, 12:20

... futures, that is, 1.00 × 100 , or 100 . The new quantity of options is 100 ÷ 0.55, or 181.8, which will have to be rounded to 182. You should then liquidate 18 of your short options to bring your ... puts. For example, if you short one UI and two puts, you have, for margin purposes, one covered put write and one naked short put. Break-Even Point The formulas for the two break-eve...

Ngày tải lên: 21/06/2014, 12:20

... strategy, 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 ... with these techniques. information JWBK147-Smith May 8, 2008 10: 22 Char Count= For More Information T he world of options trading is very dynamic. We have set up a spe...

Ngày tải lên: 21/06/2014, 12:20

... price are the same as the UI. For example, because each op- tion is for 100 shares, a price of 4.375 for an option on a stock means the total price for the option is 100 times the cost-per-share ... 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...

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 ... consuming. The Black-Scholes Model is used only for pricing European options. Yet most options traded in the world are American options, which allow for early exercise. It has...

Ngày tải lên: 20/06/2014, 20:20

... pre- mium. The formula for the simple break-even point for calls is: Simple break-even point = Strike price + call premium The price of the UI must climb by some amount before expiration for you to ... divided by the initial investment. The formula is: Return = (Profit or loss) ÷ initial investment For example, if you buy an IBM option for 5 and sell it for 7 1 / 2 ,fora profit of 2...

Ngày tải lên: 20/06/2014, 20:20

... preferably be looking for implied volatility to decline. c08 JWBK147-Smith May 8, 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 ... costs for margin trades will be more than for cash trades. The carrying cost for a cash transaction will only be the opportunity cost. Carrying costs for trades on margin include...

Ngày tải lên: 20/06/2014, 20:20

... Table 15.3 shows the same situation for a bull call spread with the 645 call purchased for 10 3 / 4 and the 650 call purchased for 7 7 / 8 . The dollar risk for a bull call spread is the net debit ... futures, that is, 1.00 × 100 , or 100 . The new quantity of options is 100 ÷ 0.55, or 181.8, which will have to be rounded to 182. You should then liquidate 18 of your short opti...

Ngày tải lên: 20/06/2014, 20:20

... prices: Dun & Bradstreet stock = 105 1 / 2 November 100 call = 6 3 / 4 November 105 call = 3 November 110 call = 1 1 / 4 This short butterfly would be initiated for a net credit of +6 3 / 4 –6+ 1 1 / 4 , ... strike price, $ 110, minus the net credit, $2, or $108 . The down-side break-even is the lowest strike price, $100 , plus the net credit, $2, or $102 . Maximum Risk The maximum...

Ngày tải lên: 20/06/2014, 20:20