Add training workflow, datasets, and runbook
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OPTION TrAdINg STrATegIeS
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amount greater than the diff erence between the futures price at the time of the option sale and the
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strike price. The trade will be profi table as long as the futures price at the time of the option expira-
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tion is not below the strike price by more than the option premium ($10.10/oz in this example).
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The short out-of-the-money put represents a less bullish posture than the short at-the-money put
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tabLe 35.6b profit/Loss Calculations: Short put (Out-of-the-Money)
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(1) (2) (3) (4) (5)
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Futures price at
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expiration ($/oz)
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premium of august $1,100
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put at Initiation ($/oz)
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Dollar amount of
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premium received
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Value of put
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at expiration
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profit/Loss on
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position [(3) – (4)]
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1,000 10.1 $1,010 $10,000 –$8,990
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1,050 10.1 $1,010 $5,000 –$3,990
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1,100 10.1 $1,010 $0 $1,010
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1,150 10.1 $1,010 $0 $1,010
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1,200 10.1 $1,010 $0 $1,010
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1,250 10.1 $1,010 $0 $1,010
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1,300 10.1 $1,010 $0 $1,010
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1,350 10.1 $1,010 $0 $1,010
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1,400 10.1 $1,010 $0 $1,010
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Price of August gold futures at option expiration ($/oz)
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Futures price at time
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of position initiation
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Breakeven price
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= $1,089.90
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Profit/loss at expiration ($)
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1,000
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−10,000
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2,500
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−2,500
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−5,000
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−7,500
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0
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1,050 1,100 1,150 1,200 1,250 1,300 1,350 1,400
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Strike price
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FIGURE 35.6b Profi t/loss Profi le: Short Put (Out-of-the-Money)
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