Trading Strategies Profit Making Techniques For Stock 12 potx

... 530 p 2434 7721 .25 .125 .125 −.0625 633.55 SP100 Apr 565 p 1724 5449 .875 .25 . 3125 −. 8125 633.55 SP100 Apr 570 p 2232 10406 1.0625 .375 .4375 −. 8125 633.55 The rows are for the prices of the ... 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 s...

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 ... the $50 price of the stock. The annualized return would be ($2 ÷ $50) × (12 ÷ 3), or 1 / 25 × 4, or 16 percent. Note that the initial investment was assumed to be $50 for the stock....

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 ... want to pay a higher price for a farther month just to have more time for the trade to work. The extra time pre- mium might be a cheap price to pay for several more months for the...

Ngày tải lên: 20/06/2014, 20:20

... 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 the financing for ... 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 of...

Ngày tải lên: 20/06/2014, 20:20

... Char Count= 178 OPTION STRATEGIES For stocks, the number of UIs is the number of round lots that were sold. If you were short 250 shares of stock, you would insert 2.5 in the formula. Maximum Risk The ... 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-...

Ngày tải lên: 20/06/2014, 20:20

... potential profit than with other option strategies. Be sure to consider the cost of commis- sions before selecting a bear spread over other bearish strategies and before selecting the strike price. Bear ... Count= 212 OPTION STRATEGIES options. The 65 strike is trading at 6 1 / 4 , the 70 strike is at 4, and the 75 strike last traded at 2. Construct your long butterfly by buying one of...

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 ... 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 price of the instrument. Usually,...

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

... 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 ... time value. You, therefore, bought the option at 12, and, at expiration, it was worth 2. The OEX needed to rise to 592 before you would have profited. You can lose money before the expira...

Ngày tải lên: 22/06/2014, 12:20

... 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 of 2 1 / 2 , your ... 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 the...

Ngày tải lên: 22/06/2014, 12:20