The option trader s guide to probability volatility and timing phần 1 pot

... become traders in the stock, futures, and options markets is to attain financial rewards. Stories about the large sums of money to be made and the successes of the rich and famous inspire a desire to achieve ... collecting tools to beat the market consistently. Successful options traders first learn to walk, then to run. Usually traders begin with simplistic strategi...

Ngày tải lên: 09/08/2014, 16:20

... limited risk because the most you stand to lose is the premium paid for the option plus commissions paid to the broker. 52 THE OPTIONS COURSE ccc_fontanills_ch3_42-75.qxd 12 /17 /04 4: 01 PM Page ... Never- theless, expiration dates and cycles are important to understand. They set the terms of the contract and spell the duration of the option holder s rights...

Ngày tải lên: 09/08/2014, 16:20

... sell another call to offset your risk. • The stock falls below the initial stock price but stays above the breakeven: The long stock position starts to lose money, but this loss is offset by the ... short strike: The short call is assigned and exercised by the option holder. You can then use the 10 0 shares from the original long stock position to satisfy your obl...

Ngày tải lên: 09/08/2014, 16:20

... Curves 6 Asking the Right Question 9 Analyzing Risk: What Separates the Winners from the Losers 11 Summary 18 Chapter 2 The Basics of Options 21 Option Definitions 21 Options on a Specific Security ... option strategies are best for any given situation, and they fail to understand just what the risk is before they make their trades. Jay Kaeppel explains these issues i...

Ngày tải lên: 09/08/2014, 16:21

... 15 .25 16 .50 19 .25 21. 50 80 Bid 1. 19 2 .19 4.00 5.62 Asked 15 .75 17 .00 19 .75 22.25 Asked 1. 38 2.44 4.38 6 .12 Market 11 .12 13 .00 15 .75 18 .50 Market 2.06 3.62 5.88 7.38 85 Bid 11 .12 12 .75 15 .75 18 .50 ... To be successful, a trader must understand that this pos- sibility exists and under what circumstances it is most likely to occur. Traders must also a...

Ngày tải lên: 09/08/2014, 16:21

... 227 6449 58 71 5293 4 715 413 7 3559 29 81 929 10 13 10 31 111 5 12 01 1 219 10 105 Figure 19 .2 Intel has identifiable support (29. 81) and resistance (47 .15 ) levels. Table 19 .1 Establish a Butterfly Spread Using ... in the money. If we did not buy this call back before 218 The Option Trader s Guide 3900 3552 3204 2856 2508 216 0 18 12 10 24 11 09 11 30 12...

Ngày tải lên: 09/08/2014, 16:21

... AT 1 1 10 0 C AOO MT 1 1 10 0 P AOO AA 1 1 10 5 C AOO MA 1 1 10 5 P AOO AB 1 1 11 0 C AOO MB 1 1 11 0 P AOO AC 1 1 11 5 C AOO MC 1 1 11 5 P AOO AD 1 1 12 0 C AOO MD 1 1 12 0 P AOW AE 1 1 12 5 C AOW ME 1 1 12 5 ... AOL MP 1 1 16 .25 P AOL AQ 1 1 16 .875 C AOL MQ 1 1 16 .875 P AOL AW 1 1 17 .5 C AOL MW 1 1 17 .5 P AOL AR 1 1 18 .12 5 C AOL M...

Ngày tải lên: 09/08/2014, 16:20

... options traders should combine the values of the Greeks used to create the optimal options spread. The result will allow the trader to more accurately assess the risks of any given options spread. Understanding ... known as a long synthetic straddle. Conversely, you can create a short synthetic straddle by either purchasing 10 0 shares of stock and selling two ATM calls o...

Ngày tải lên: 09/08/2014, 16:20

... that case, the loss is equal to the commissions paid for the trade. On the other hand, if the stock falls sharply, the losses can be substantial. The downside breakeven is equal to: higher strike ... belief the stock was about to reverse course. Straddles, Strangles, and Synthetics 2 31 ccc_fontanills_ch8 _18 7-233.qxd 12 /17 /04 4:32 PM Page 2 31 fly is derived from...

Ngày tải lên: 09/08/2014, 16:20

... calls to the upside and the short shares to the downside). Re- member, as long as you use long options—puts or calls—it is a long synthetic straddle. I prefer to use ATM options because they have ... is selecting a stock that has been in the news, whose volatility is high, and for which a type skew exists (a type skew is when a volatility skew exists between the put 29...

Ngày tải lên: 09/08/2014, 16:20