Add training workflow, datasets, and runbook

training_data/curated/text/0610bb0ced46352cc6ade9e058ab974789e394da49e83ea71345d1de13dae515.txt

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+Understanding and Managing Leverage    • 179
+In this example, we suffer a realized loss of 96 percent (= $4,800 ÷ 
+$5,000) if the stock falls 35 percent, so the equation becomes
+= − =− ×Lossleverage 96%
+35% 2.8
+ 
+(By convention, I’ll always write the loss leverage as a negative.) This 
+equation just means that it takes a drop of 35 percent to realize a loss on 
+96 percent of the allocation.
+The profit leverage is simply a ratio of the levered portfolio’s net profit 
+to the unlevered portfolio’s net profit at the fair value estimate. For this 
+example, we have
+== ×Profitleverage $4,200
+$1,472 3.0
+ 
+Let’s do the same exercise for the ATM and OTM options and see 
+what fully levered portfolios with each of these options would look like 
+from a risk-return perspective. If we bought as many $22-strike options as 
+a $5,000 position size would allow (19 contracts in all), our profit and loss 
+graph and table would look like this:
+02468 10 12 14 16 18 20 22 24
+Stock Price
+Levered Strategy Overview
+Gain (Loss) on Allocation
+26 28 30 32 34 36 38 40 42 44 46 48 50(20,000)
+-
+40,000
+60,000
+80,000
+100,000
+20,000
+Unrealized Gain
+Unrealized Loss
+Cash Value
+Net Gain (Loss) - Levered
+Realized Loss