The option trader s guide to probability volatility and timing phần 4 ppsx

... Those who succeed consistently in the long run are those who make the effort and take the time to learn the skills re- quired to achieve lasting success. They apply these lessons in the real world, ... B OPTION EXCHANGES, OPTION BROKERS, OPTION SYMBOLS, AND OPTION VOLUME 255 Exchanges Options are traded at each of the exchanges listed in Tables B.1 and B.2. Table...

Ngày tải lên: 09/08/2014, 16:20

... 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

... purchasing a call option has a 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 ... owner. Short Stock Case Study Outside of trading options, there is only one method a trader has to make a profit during a downtrend in stocks: short selling stock....

Ngày tải lên: 09/08/2014, 16:20

... sell another call to offset your risk. ã 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 ... price, but stays below the breakeven: The short stock position starts to lose money, but this loss is offset by the credit received from the short put. As long as the sto...

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 ... important to them than the volatility of the options (implied volatility) and the volatility of the underlying stock (statistical or historical...

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 ... hold the worth- less call for a possible stock reversal. ã The underlying shares fall within the downside and upside breakevens: This is the range of risk and will ca...

Ngày tải lên: 09/08/2014, 16:20

... also our next subject of discussion. VOLATILITY SKEWS REVISITED As we have seen, calendar spreads are trades that involve the purchase and sale of options on the same shares, with the same strike ... decisions. As in any profession, there are top-notch pro- fessionals as well as others who have missed their calling and should not be offering their services. The best advice I can...

Ngày tải lên: 09/08/2014, 16:20

... as Trea- sury bills and notes. This increases bank reserves, which increases the money supply and causes short-term interest rates to decrease. Reduced rates induce consumers and businesses to ... decreases. When there are less bank reserves, short-term interest rates increase. This means consumers and businesses have to pay the bank more in order to borrow money. Less bor...

Ngày tải lên: 09/08/2014, 16:20

... it seems to me that prayer is truly the method most often used by traders and investors. Most traders and investors do very little analysis and have no idea as to what is going on; still they ... ridiculous price multiples due to continued up- grades by analysts as the stock prices went into the stratosphere? How many investors still own those stocks today under $10 a share?...

Ngày tải lên: 09/08/2014, 16:20

... predefined loss because the first loss is always the best. On the other hand, discipline gives you the impenetrable strength to keep holding on to an options position when success is at hand or passing ... Tech, Networks, E-Business, and Sciences and Medicine. The site also has links to their magazine. Investor s Business Daily www.investors.com IBD s site has incorporated...

Ngày tải lên: 09/08/2014, 16:20

... levels of the National Association of Securities Dealers Automated Quotations System (Nasdaq). Level I quotes provide basic in- formation such as the best bids and asks for Nasdaq-listed stocks. ... opposite transaction. running stops When quoted, floor traders use these to move the market. When stops are bunched together, traders may move the market in order to activate stop ord...

Ngày tải lên: 09/08/2014, 16:20

... 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 26 Intrinsic Value versus Extrinsic Value ... 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 iss...

Ngày tải lên: 09/08/2014, 16:21

... received the option premium of $450. Nevertheless, if the stock falls too far, both traders will face the prospect of a large loss and may need to act in order to cut the loss. The bot- tom line is ... implications for each choice? The best way to assess the relative advantages and disadvantages is to examine the risk curves for each potential trade. Figures 2....

Ngày tải lên: 09/08/2014, 16:21

... the stock falls, the option position ã Makes money if the stock remains relatively unchanged ã Incurs losses if the stock makes a significant move in either direction (see Figures 3. 5 and 3. 6) Reasons ... oppor- tunities to astute traders. Each strategy also entails unique risks, which must be understood and accounted for if you hope to use them successfully. More inform...

Ngày tải lên: 09/08/2014, 16:21

... points. In other words, if Toys “R” Us falls to 10.04 or rises to 21.33 at any time during the next three months, this would constitute a statistically significant move for this stock. As a result, ... in the implied volatility of the option bought versus that of the option sold. This underscores the importance of having as wide a spread as possible between the volatili...

Ngày tải lên: 09/08/2014, 16:21