Trading Strategies Profit Making Techniques For Stock 10 pot

... 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 ... the strike price. For example, a stock selling for less than $25 per share has strike prices 2.50 dollars or points apart, whereas a stock selling for greater than $200 h...

Ngày tải lên: 20/06/2014, 20:20

... Price of the Option Fortunately, this one factor is stable and does not change significantly. Strike prices for stock options do change whenever there is a stock split or a stock dividend. Interest ... similar strategies, not to compare one strategy with other types of investments. For example, you make 9 percent for a one-month investment, but you do not know what your return wil...

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 ... pay $11,555 for the 100 shares and receive $2,500 for our short call for a net investment of $9,055. However, the position is not ac- ceptable. We wanted to own the equivalent of...

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

... maximum profit potential comes from writing out-of-the-money 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 −6 −8 10 −4 40 41 42 43 44 45 46 47 48 49 50 51 53 54 55 56 57 58 59 60 52 FIGURE ... Char Count= 178 OPTION STRATEGIES For stocks, the number of UIs is the number of round lots that were sold. If y...

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 , ... percentage of the potential profit than with other option strategies. Be sure to consider the cost of commis- sions before selecting a bear spread over other bearish strategi...

Ngày tải lên: 20/06/2014, 20:20

... Price of the Option Fortunately, this one factor is stable and does not change significantly. Strike prices for stock options do change whenever there is a stock split or a stock dividend. Interest ... to use “deltas” to describe stock option positions but actual positions for everything else. For example, a delta of 0.50 is often referred to as “50 deltas.” Thus, 100 deltas is...

Ngày tải lên: 22/06/2014, 12:20

... unique distribution pattern. For example, the price of stock index and stock options has an upward drift to it. Stock prices have moved erratically higher since stocks began trading under the buttonwood ... critical for traders considering theoretical edge or trading volatility (see Chapter 4 for information on these ideas). One has to know what the implied volatility is befor...

Ngày tải lên: 22/06/2014, 12:20

... you will pay $750 for 10 stock options with a premium of 0.75 each. c06 JWBK147-Smith May 8, 2008 9:52 Char Count= 90 OPTION STRATEGIES THE BOTTOM LINE You now have two methods for figuring out ... pay $11,555 for the 100 shares and receive $2,500 for our short call for a net investment of $9,055. However, the position is not ac- ceptable. We wanted to own the equivalent of 1...

Ngày tải lên: 22/06/2014, 12:20

... point for you to make 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 any money at expiration. For example, ... by the initial investment. The formula is: Return = (Profit or loss) ÷ initial investment For example, if you buy an IBM put option for 5 and sell it for 7 1 / 2 ,for a profit...

Ngày tải lên: 22/06/2014, 12:20