Add training workflow, datasets, and runbook

training_data/curated/text/870b0f3eae0e7ee89595ec4b1fe84ed55d4aa30999ba793bc5b757ce943d0505.txt

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+694 Part V: Index Options and Futures 
+Example: The put backspread was established under the following conditions: 
+Strike 
+550 
+600 
+Put 
+Price 
+Theoretical 
+Put Price 
+5.4 
+27.6 
+Implied 
+Volatility 
+13% 
+17% 
+If January soybean futures should fall to 550, one would expect the implied 
+volatility of the January 550 puts that are owned to be about 16% or 17%, since they 
+would be at-the-money at that time. This makes the assumption that the at-the­
+money puts will have about a 17% implied volatility, which is what they had when the 
+position was established. 
+Since the strategy involves being long a large quantity of January 550 puts, this 
+increase in implied volatility as the futures drop in price will be of benefit to the 
+spread. 
+Note that the implied volatility of the January 600 puts would increase as well, 
+which would be a small negative aspect for the spread. However, since there is only 
+one put short and it is quite deeply in the money with the futures at 550, this nega­
+tive cannot outweigh the positive effect of the expansion of volatility on the long 
+January 550 puts. 
+In a similar manner, the call spread would benefit. The implied volatility of the 
+written options would actually drop as the futures rallied, since they would be less far 
+out-of-the-money than they originally were when the spread was established. While 
+the same can be said of the long options in the spread, the fact that there are extra, 
+naked, options means the spread will benefit overall. 
+In summary, the futures option strategist should be alert to mispricing situations 
+like those described above. They occur frequently in a few commodities and occa­
+sionally in others. The put backspread strategy has limited risk and might therefore 
+be attractive to more individuals; it is best used in downtrending and/or volatile mar­
+kets. However, if the futures are in a smooth uptrend, not a volatile one, a ratio call 
+spread would be better. In either case, the strategist has established a spread that is 
+statistically attractive because he has sold options that are expensive in relation to the 
+ones that he has bought.