Add training workflow, datasets, and runbook

training_data/curated/text/66b693af5224c08d72b9e4f65b71a13f7960c196c8de0354774f48c7e965015a.txt

@@ -0,0 +1,50 @@
+338 
+TABLE 23-1. 
+Butterfly spread. 
+Bull Spread 
+(Buy Option at 50, ... plus ... 
+Sell at 60) 
+Calls (6 debit) 
+Calls (6 debit) 
+Puts (4 credit) 
+Puts (4 credit) 
+Bear Spread 
+(Buy Option at 70, 
+Sell at 60) 
+Calls (4 credit) 
+Puts (6 debit) 
+Calls (4 credit) 
+Puts (6 debit) 
+Part Ill: Put Option Strategies 
+Total Money 
+2 debit 
+12 debit 
+8 credit 
+2 debit 
+The factor that causes all these combinations to be equal in risk and reward is 
+the arbitrageur. If put and call prices get too far out of line, the arbitrageur can take 
+riskless action to force them back. This particular form of arbitrage, known as the box 
+spread, is described later, in Chapter 27, Arbitrage. 
+Even though all four ways of constructing the butterfly spread are equal at 
+expiration, some are superior to others for certain price movements prior to expira­
+tion. Recall that it was previously stated that bull spreads are best constructed with 
+calls, and bear spreads are best constructed with puts. Since the butterfly spread is 
+merely the combination of a bull spread and a bear spread, the best way to set up the 
+butterfly spread is to use calls for the bull spread and puts for the bear spread. This 
+combination is the one listed on the second line of Table 23-1. This strategy involves 
+the largest debit of the four combinations and, as a result, many investors shun this 
+approach. However, all the other combinations involve selling an in-the-money put 
+or call at the outset, a situation that could lead to early exercise. The reader may also 
+recall that the credit combination, listed on the third line of Table 23-1, was previ­
+ously described as a protected straddle position. That is, one sells a straddle and 
+simultaneously buys both an out-of-the-money put and an out-of-the-money call with 
+the same expiration month, as protection for the straddle. Thus, a butterfly spread is 
+actually the equivalent of a completely protected straddle wiite. 
+A butterfly spread is not an overly attractive strategy, although it may be useful 
+from time to time. The commissions required are extremely high, and there is no 
+chance of making a large profit on the position. The limited risk feature is good to 
+have in a position, but it alone cannot compensate for the less attractive features of 
+the strategy. Essentially, the strategist is looking for the stock to remain in a neutral 
+pattern until the options expire. If the potential profit is at least three times the max­
+imum 1isk (and preferably four times) and the underlying stock appears to be in trad­
+ing range, the strategy is feasible. Othe:nvise, it is not.