Add training workflow, datasets, and runbook

training_data/curated/text/d86e49f8bb92b27cef30d8c30876602cd74be739b85d1f922298bfcd36e5b2ca.txt

@@ -0,0 +1,40 @@
+434 Part IV: Additional Considerations 
+underlying stock makes no difference in the eventual outcome. This is generally a 
+true statement. However, there are some risks, and they are great enough that one 
+can actually lose money in conversions and reversals if he does not take care. The 
+risks are fourfold in reversal arbitrage: An extra dividend is declared, the interest rate 
+falls while the reversal is in place, an early assignment is received, or the stock is 
+exactly at the striking price at expiration. Converters have similar risks: a dividend 
+cut, an increase in the interest rate, early assignment, or the stock closing at the strike 
+at expiration. 
+These risks are first explored from the viewpoint of the reversal trader. If the 
+company declares an extra dividend, it is highly likely that the reversal will become 
+unprofitable. This is so because most extra dividends are rather large - more than the 
+profit of a reversal. There is little the arbitrageur can do to avoid being caught by the 
+declaration of a truly extra dividend. However, some companies have a track record 
+of declaring extras with annual regularity. The arbitrageur should be aware of which 
+companies these are and of the timing of these extra dividends. A clue sometimes 
+exists in the marketplace. If the reversal appears overly profitable when the arbi­
+trageur is first examining it (before he actually establishes it), he should be somewhat 
+skeptical. Perhaps there is a reason why the reversal looks so tempting. An extra div­
+idend that is being factored into the opinion of the marketplace may be the answer. 
+The second risk is that of variation in interest rates while the reversal is in 
+progress. Obviously, rates can change over the life of a reversal, normally 3 to 6 
+months. There are two ways to compensate for this. The simplest way is to leave 
+some room for rates to move. For example, if rates are currently at 12% annually, one 
+might allow for a movement of 2 to 3% in rates, depending on the length of time the 
+reversal is expected to be in place. In order to allow for a 2% move, the arbitrageur 
+would calculate his initial profit based on a rate of 10%, 2% less than the currently 
+prevailing 12%. He would not establish any reversal that did not at least break even 
+with a 10% rate. The rate at which a reversal breaks even is often called the "effec­
+tive rate" - 10% in this case. Obviously, if rates average higher than 10% during the 
+life of the reversal, it will make money. Normally, when one has an entire portfolio of 
+reversals in place, he should know the effective rate of each set of reversals expiring 
+at the same time. Thus, he would have an effective rate for his 2-month reversals, his 
+3-month ones, and so forth. 
+Allowing this room for rates to move does not necessarily mean that there will 
+not be an adverse affect if rates do indeed fall. For example, rates could fall farther 
+than the room allowed. Thus, a further measure is necessary in order to completely 
+protect against a drop in rates: One should invest his credit balances generated by the 
+reversals in interest-bearing paper that expires at approximately the same time the 
+reversals do, and that bears interest at a rate that locks in a profit for the reversal