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

... 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

... 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 ... charges a commission for managing the IPO and generates cash by selling the shares to investors. The commission is usually about 10 percent of the total value of...

Ngày tải lên: 09/08/2014, 16:20

... agrees to sell 10 0 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 ... of 42 The Option Trader s Guide Table 3.2 Expected Returns at Different Price Levels Change in Stock Price Buy 10 0 Shares Buy 10 0 Shares, Short 1 Call Stock up 20%...

Ngày tải lên: 09/08/2014, 16:21

... Expiration 37 32 27 22 17 12 7 2 11 2. 81 20.00 19 .63 19 .25 18 .94 18 .56 18 .25 18 .00 17 .88 10 8 .12 16 .13 15 .69 15 .25 14 . 81 14.38 13 .88 13 .44 13 .19 10 3.43 12 .56 12 .13 11 .63 11 .06 10 .50 9.88 9 .19 8.56 98.68 ... that the options with strike prices closest to the current stock price the 90, 95, and 10 0 strike price options—show the smal...

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

... 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

... 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