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Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition 9 doc

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_2 docx

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_2 docx

... Exchange-traded option transactions,on the other hand, can be consummated in seconds.The introduction of FLEX options blurred the line between exchange-traded and OTC options. FLEX options are options ... be:1. A stock, like 100 shares of Citibank stock. (Note that options on stocksare always for 100 shares of the underlying stock. Options on futuresare for the same quantity as the underlying futures ... the option. CHANGES IN OPTION SPECIFICATIONSThe terms of an option contract can change after being listed and traded.This is very infrequent and happens only in stock options when the stock splits...
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Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_3 pptx

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_3 pptx

... in foreign interest rates. Thisis only used in foreign exchange options. It has no impact on any other options. Foreign exchange options are affected by phi because options arepriced on the forward ... 0 .91 6540 0.0677 0.5384 0 .93 6030 0.0 399 0.5334 0 .95 8220 0.0146 0.5274 0 .98 1310 0.00 09 0.5 195 0 .99 78c03 JWBK147-Smith April 25, 2008 8:33 Char Count=The Basics of Option Price Movements 37Return-per-DayThe ... option strategies exist largely to exploit this concept. They sim-ply attempt to buy undervalued options and sell overvalued options. The option trader then attempts to hedge out all other forms...
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Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_5 ppt

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_5 ppt

... at expiration. For example, assume you boughtOEX 580 options at 12 and the OEX was at 575. If the option expires and c06 JWBK147-Smith May 8, 2008 9: 52 Char Count=84 OPTION STRATEGIES FIGURE ... looking like this: Option Premium Imp Vol Delta Gamma Theta VegaOct 115 C −3.50 27.33 −.61 −.0 597 . 092 2 −. 090 7IBM 18,141 1.57Net Position and Profit/Loss +18.10 .96 −.0 597 . 092 2 −. 090 7Basically, ... stand with strategy number one. Option Premium Imp Vol Delta Gamma Theta VegaOct 115 C −3.50 27.33 −.61 −.0 597 . 092 2 −. 090 7IBM 18,141 1.57Net Position and Profit/Loss +18.10 .96 −.0 597 . 092 2...
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Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_6 potx

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_6 potx

... are trading for $4 and the out-of-the-money options are trading for $2. This means that you could have twice as many of the out-of-the-money options as you could of the at-the-money options. This ... far options is much greater than near options, and you willbe able to profit handsomely if the implied volatility moves significantlyhigher.The final consideration is liquidity. Far-dated options ... by some amount before expiration for you to make any money at expiration. For example, assume you boughtOEX 180 options at 12 and the OEX was at 185. If the option expires and the OEX is at...
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Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_9 doc

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_9 doc

... out-of-the-money options is greater than the at-the-money options. You can sellthe out-of-the-money options and buy the at-the-money options, expectingthe volatility skew to go away or to be reduced. For ... follow-up strategies. ) The pointto remember is that you will need more out-of-the-money options to cre-ate a delta-neutral position than in-the-money or at-the-money options. Theadditional options ... S&P 500 futures contract at 225 and sell two 225put options with deltas of −0.50 each. The delta on the short stock index futures is −1.00 so you need to sell options that have a total delta...
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Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_10 docx

Option Strategies Profit Making Techniques for Stock Index and Commodity Options 2nd Edition_10 docx

... May 8, 2008 10:14 Char Count= 198 OPTION STRATEGIES 3 Profit 210−1−2−3Price of Underlying Instrument404142434441464748 49 5051535455565758 59 6052FIGURE 16.1 Bear SpreadNote ... potential profit thanwith other option strategies. Be sure to consider the cost of commis-sions before selecting a bear spread over other bearish strategies and before selecting the strike price.Bear ... two strike prices, in this case, 645. Table 16.1 shows theprofit and loss for each of the two options and the net profit or loss for thetotal position at different prices of the MMI when it expires.Another...
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Profit Making Techniques for Commodity Options 2nd Edition_2 pptx

Profit Making Techniques for Commodity Options 2nd Edition_2 pptx

... are trading for $4 and the out-of-the-money options are trading for $2. This means that you could have twice as many of the out-of-the-money options as you could of the at-the-money options. This ... by some amount before expiration for you to make any money at expiration. For example, assume you boughtOEX 180 options at 12 and the OEX was at 185. If the option expires and the OEX is at ... far options is much greater than near options, and you willbe able to profit handsomely if the implied volatility moves significantlyhigher.The final consideration is liquidity. Far-dated options...
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Profit Making Techniques for Commodity Options 2nd Edition_3 pdf

Profit Making Techniques for Commodity Options 2nd Edition_3 pdf

... out-of-the-money options is greater than the at-the-money options. Youcan sell the out-of-the-money options and buy the at-the-money options, expecting the volatility skew to go away or to be reduced. For ... costs and that you will hold the write for one month.Example 10.1 Net investment required–CommonCost of stock $ 196 ,95 0+ Stock commissions +1,300− Options premium received −5,688+ Options ... required − 192 ,95 2Net profit $7,643Return-if-exercised = 7,643 ÷ 192 ,95 2 = 3 .96 %(47.53% annualized)Example 10.3 Return-if-unchanged–CommonProceeds from stock sale $ 196 ,95 0− Stock commissions...
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Profit Making Techniques for Commodity Options 2nd Edition_5 pdf

Profit Making Techniques for Commodity Options 2nd Edition_5 pdf

... out-of-the-money options is greater than the at-the-money options. You can sellthe out-of-the-money options and buy the at-the-money options, expectingthe volatility skew to go away or to be reduced. For ... follow-up strategies. ) The pointto remember is that you will need more out-of-the-money options to cre-ate a delta-neutral position than in-the-money or at-the-money options. Theadditional options ... S&P 500 futures contract at 225 and sell two 225put options with deltas of −0.50 each. The delta on the short stock index futures is −1.00 so you need to sell options that have a total delta...
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Profit Making Techniques for Commodity Options 2nd Edition_10 potx

Profit Making Techniques for Commodity Options 2nd Edition_10 potx

... Sons, 198 0), Commodity Spreads (JohnWiley & Sons, 198 1 and Traders Press, 198 9), How to Make Money in Stock Index Futures (McGraw-Hill, 198 5, paperback edition 198 8), Sea-sonal Charts for ... 23Far-term/long-term option, 12Financing costs, 3–4, 31FLEX options, 11Foreign exchange options: interest rates and, 28Phi and, 48– 49 Forward price, 61Futures contracts, 11, 42, 1 29, 165Gamma:defined, ... other option tradersr Options trading ideas And much, much more!3 09 c24 JWBK147-Smith April 25, 2008 11:16 Char Count=How to Make Money Trading Options 295 Investment Mentoring InstituteOptions...
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