The option trader s guide to probability volatility and timing phần 5 potx

... with a strike price of 55 . The stock falls to 45 and the trader decides he wants to short the stock from 55 . To make this happen he calls his broker and says that he wants to exercise this particular ... strike price of 55 . The stock rises to 65 and the trader decides she wants to own the stock. To make this happen she would call her broker and sa...

Ngày tải lên: 09/08/2014, 16:21

... close) the option at a profit. Hence, 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 ... 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. As pre...

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 ... to offset and further reduce the loss. • XYZ falls below the breakeven (52 .50 ), but not as low as the short strike (50 ): The short call is assigned and you are oblig...

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 ... debit), or $ 15: [ 25 – (5 × 2)] ÷ (2 – 1) – 0 = $ 15] . Losses begin to develop as the stock moves below the breakeven and are limited to the stock falling to ze...

Ngày tải lên: 09/08/2014, 16:20

... 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 B.1 Stock and Stock Index Option Exchanges Exchange ... 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...

Ngày tải lên: 09/08/2014, 16:20

... 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 within the Standard & Poor s 50 0 ... 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. J...

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

... 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

... 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