Add training workflow, datasets, and runbook

training_data/curated/text/1404f15ae53f314e61ee815858236068751ae7469b838c0563a244895e082213.txt

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+Understanding and Managing Leverage    • 181
+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(5,000)
+-
+15,000
+10,000
+20,000
+25,000
+30,000
+5,000
+Unrealized Gain
+Unrealized Loss
+Cash Value
+Net Gain (Loss) - Levered
+Realized Loss
+Instrument Maximum-Loss Price Net Profit at Fair Value Estimate
+Stock $0 $1,472
+Option $22 (11 × stock loss) $4,833 (5.1 × stock profit)
+The 11 times loss figure was calculated in the following way: there is a 
+total of 47.3 percent of my allocation to this investment that is lost if the price 
+of the stock goes down by 4.3 percent, so −47.3 percent/4.3 percent = −11.0. 
+Obviously, this policy of keeping some cash in reserve represents a sensible ap-
+proach to portfolio management when leverage is used. An investor in straight 
+stock who makes 20 investments that do not hit his or her expected fair value 
+within the investment horizon might have a few bad years of performance, but 
+an investor who uses maximum option leverage and allocates 5 percent to 20 
+ideas will end up bankrupt if these don’t work out by expiration time!
+Similar to setting a cash reserve, you also might decide to make an 
+investment that combines cash, stock, and options. For example, I might 
+buy 100 shares of Intel, three ITM option contracts, and leave the rest of 
+my 5 percent allocation in cash. Here is what that profit and loss profile 
+would look like: