The option trader s guide to probability volatility and timing phần 3 pptx

... 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 prices. This is a common ... 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 information o...

Ngày tải lên: 09/08/2014, 16:21

... 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 ... in the stock s price is anticipated. 2. Check to see if this stock has liquid options available. 3. Review options premiums with various expiration dates and strike prices. O...

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 ... becoming a successful trader. He explains the different strategies available and when to use each one. He shows how to accurately assess volatility and from ther...

Ngày tải lên: 09/08/2014, 16:21

... even if the stock rises above the strike price • Retains the right to buy back the option (possibly at a loss) if she does not want the stock to get called away Reasons to Trade Options 41 More ... trading—quite the oppo- site. Options are best used to augment your other investments. The Three Primary Uses of Options There are three primary uses of options. Each of the...

Ngày tải lên: 09/08/2014, 16:21

... (tab.) overvalued options versus undervalued options, 50, 52, 52 (tab.) theoretical value, 47–49 Options basics of, 21 35 in -the- money versus out-of- the- money options, 32 35 , 32 (fig.), 33 (figs.), 34 (tabs.) intrinsic ... 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 su...

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

... trading options, there is only one method a trader has to make a profit during a downtrend in stocks: short selling stock. As previously discussed, going short is the process of borrowing shares from ... 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 and of...

Ngày tải lên: 09/08/2014, 16:20

... making these kinds of assessments, options traders typically refer to the following risk measurements: delta, gamma, theta, and vega. These four elements of options risk are referred to as the option ... important to them than the volatility of the options (implied volatility) and the volatility of the underlying stock (statistical or historical volatility) . Pro...

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 ... position at a loss or purchasing back the shorted stock and possibly holding the call options. • The underlying shares rise above the upside breakeven: If the stock s...

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 ... 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...

Ngày tải lên: 09/08/2014, 16:20