Add training workflow, datasets, and runbook

training_data/curated/text/c2a7080c871d4c6b883bdb83194c83ea59658e41a78b0a69c46b5b6d2859bac8.txt

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+52  •   The Intelligent Option Investor
+Thus, if you thought that you would win $1 for each successful invest-
+ment you made, you might only be willing to pay $0.04 to play the game. In 
+this case, you would be wagering $0.04 twenty times in the hope of making 
+$1 once—paying $0.80 total to net $0.20 for a (probabilistic) 25 percent 
+return.
+Now how much would you be willing to bet if the perceived chance 
+of success was not 1 in 20 but rather 1 in 5? With options, we can increase 
+the chance of success simply by altering the range of exposure. Let’s try this 
+now by moving the strike price down to $60:
+5/18/2012 5/20/2013 249 499 749
+20
+30
+40
+50
+60
+70
+80
+90
+100
+999
+Advanced Building Corp. (ABC)
+Date/Day Count
+Stock Price
+GREEN
+After moving the strike price down, one corner of the range of 
+exposure we have gained falls within the BSM probability cone. This option 
+will be significantly more expensive than the $70 strike option because the 
+perceived probability of the stock moving into this range is material.
+If we say that the chance of this call option paying its owner $1 is 
+1 in 5 rather than 1 in 20 (the range of exposure is within the 16 percent 
+line, so we’re estimating it as a 20 percent chance—1 in 5, in other words), 
+we should be willing to pay more to make this investment. If we expected 
+to win $1 for every five tries, we should be willing to spend $0.16 per bet. 
+Here we would again expect to pay $0.80 in total to net $0.20, and again 
+our expected percentage return would be 25 percent.