Add training workflow, datasets, and runbook

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+566 Part V: Index Options and Futures 
+SIMULATING AN INDEX 
+The discussion in the previous section assumed that one bought enough stocks to 
+duplicate the entire index. This is unfeasible for many investors for a variety of rea­
+sons, the most prominent being that the execution capability and capital required 
+prevent one from being able to duplicate the indices. Still, these traders obviously 
+would like to take advantage of theoretical pricing discrepancies in the futures con­
+tracts. The way to do this, in a hedged manner, would be to set up a market basket 
+of a small number of stocks, in order to have some sort of hedge against the futures 
+position. 
+In this section, we will demonstrate approaches that can be taken to hedge the 
+futures position with a small number of stocks. This is different from when we looked 
+at how to hedge individualized portfolios with index futures or options, because we 
+are now going to try to duplicate the performance of the entire index, but do it with 
+a subset of stocks in the index. In either of these cases, a mathematical technique 
+called regression analysis can be used to measure the performance of these portfo­
+lios or small market baskets. However, we will take a simpler approach that does not 
+require such sophisticated calculations, but will produce the desired results. 
+USING THE HIGH-CAPITALIZATION STOCKS 
+Recall that in a capitalization-weighted index, the stocks with the largest capitaliza­
+tions (price times float) have the most weight. In many such indices, there are a 
+handful of stocks that carry much more weight than the other stocks. Therefore, it is 
+often possible to try to create a market basket of just those stocks as a hedge against 
+a futures position. While this type of basket will certainly not track the index exactly, 
+it will have a definite positive correlation to the index. 
+What one essentially tries to accomplish with the smaller market basket is to 
+hedge dollars represented by the index with the same dollar amount of stocks. No 
+hedge works in which the total dollars involved are not nearly equal. Listed below are 
+the steps necessary to compute how many shares of each stock to buy in order to cre­
+ate a "mini-index" to hedge futures or options on a larger index: 
+1. Determine the percent of the large index to be hedged (OEX, NYSE, S&P 500, 
+etc.) that each stock comprises. This information is readily available from the 
+exchange on which the futures or options trade or can be calculated by the meth­
+ods shown in Chapter 29. 
+2. Determine the percent of the mini-index to be constructed that each stock com­
+prises, by inflating their relative percentages to total 100%.