The option trader s guide to probability volatility and timing phần 7 ppt

... 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

... 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 ... Losses begin to develop as the stock moves below the breakeven and are limited to the stock falling to zero. In this case, if the stock falls to zero, one short...

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 ... businesses and feels that one of the dumbest reasons to purchase a stock is because it is going up. Buffett feels that investors should draw a circle around the busi- ness...

Ngày tải lên: 09/08/2014, 16:20

... 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 in The Option Trader s Guide to ... Trade Selection 251 Appendix B Option Exchanges, Option Brokers, Option Symbols, and Option Volume 255 Exchanges 255 Brokerage Firms 2 57 Resources 2 57 Stock a...

Ngày tải lên: 09/08/2014, 16:21

... agrees to sell 100 shares of stock (or one futures con- tract) at the option s strike price, even if the stock rises above the strike price • Retains the right to buy back the option (possibly ... 50 is considered in the money as long as the price of the stock is greater than 50. A put option with a strike price of 50 is considered in the money as long as the pri...

Ngày tải lên: 09/08/2014, 16:21

... which they buy inexpensive options and sell expensive options, thus obtaining the best of both worlds. These are key steps in consis- tently placing the odds as far in your favor as possible. To ... that the options with strike prices closest to the current stock price the 90, 95, and 100 strike price options—show the smallest difference between theoretical and actual pri...

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

... rallies sharply. If the stock drops sharply, your choices are these: • Sell the stock, buy back the call, and exit the trade com- pletely to avoid additional losses. • Hold onto both positions and ... place to stop themselves out if the stock continues to decline. One other alternative is to use the amount that you saved by initially writing the naked put as a stop-l...

Ngày tải lên: 09/08/2014, 16:21

... 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, ... 159–162 and calendar spreads, 175 – 177 considerations in selecting option- trading strategies, 72 74 current implied volatility and relative volatility rank, 72...

Ngày tải lên: 09/08/2014, 16:20

... rewards. Stories about the large sums of money to be made and the successes of the rich and famous inspire a desire to achieve the same level of financial success. Just as it is a business s objective ... investors a way to buy and sell shares that represent entire baskets of stocks. In the case of Spiders, the basket of stocks represents the companies included withi...

Ngày tải lên: 09/08/2014, 16:20