Add training workflow, datasets, and runbook
This commit is contained in:
@@ -0,0 +1,46 @@
|
||||
24 • The Intelligent Option Investor
|
||||
Here an investor is bullish on the prospects of the stock and is tailor -
|
||||
ing where to gain and accept exposure by selling a short-term put and
|
||||
simultaneously buying a longer-term call. By doing this, the investor
|
||||
basically subsidizes the purchase of the call option with the sale of the
|
||||
put option, thereby reducing the level the stock needs to exceed on the
|
||||
upside before one breaks even. In this case, we’re assuming that the call
|
||||
option costs $1.50 and the put option trades for $1.00. The cash inflow
|
||||
from the put option partially offsets the cash outflow from the call op-
|
||||
tion, so the total breakeven amount is just the call’s $60 strike price plus
|
||||
the net of $0.50.
|
||||
Effective Buy Price/Effective Sell Price
|
||||
One thing that I hope you realized while looking at each of the preceding
|
||||
diagrams is how similar each of them looks to a particular part of our long
|
||||
and short stock diagrams:
|
||||
Buying a stock.
|
||||
-
|
||||
20
|
||||
40
|
||||
60
|
||||
80
|
||||
100
|
||||
120
|
||||
140
|
||||
160
|
||||
180
|
||||
200
|
||||
-
|
||||
20
|
||||
40
|
||||
60
|
||||
80
|
||||
100
|
||||
120
|
||||
140
|
||||
160
|
||||
180
|
||||
200
|
||||
RED
|
||||
GREEN
|
||||
GREEN
|
||||
RED
|
||||
Short selling a stock.
|
||||
For example, doesn’t the diagram labeled “Buying a call for growth”
|
||||
in the preceding section look just like the top part of the buying stock
|
||||
diagram?
|
||||
Reference in New Issue
Block a user