Add training workflow, datasets, and runbook

training_data/curated/text/ff9350e5045a90f42b5fa2bc22d2d734252f40361eab237a93a92321ab2db286.txt

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+870 
+FIGURE 40-8. 
+XYZ ratio spread. 
+f/) 
+f/) 
+3000 
+2000 
+.3 1000 
+~ 
+e a.. 
+(r.> 
+40 
+Part VI: Measuring and Trading Volatility 
+45 55 60 
+At Expiration 
+Stock Price 
+Thus, a delta neutral straddle position would consist of buying 8 J anua:ry 50 calls 
+and buying 11 Februa:ry 50 puts. The straddle has no market exposure, at least over 
+the short term. Note that the delta neutral straddle has a significantly different prof­
+it picture from the delta neutral ratio spread, but they are both neutral and are both 
+based on the fact that the Janua:ry 50 call is cheap. The straddle makes money if the 
+stock moves a lot, while the other makes money if the stock moves only a little. (See 
+Figure 40-9.) 
+Can these two vastly different profit pictures be depicting strategies in which 
+the same thing is to be accomplished ( that is, to capture the underpriced nature of 
+the XYZ Janua:ry 50 call)? Yes, but in order to decide which strategy is "best," the 
+strategist would have to take other factors into consideration: the historical volatility 
+of the underlying security, for example, or how much actual time remains until 
+Janua:ry expiration, as well as his own psychological attitude toward selling uncovered 
+calls. A more precise definition of the other risks of these two positions can be 
+obtained by looking at their position gammas. 
+Delta Neutral Is Not Entirely Neutral. In fact, delta neutral means that 
+one is neutral only with respect to small price changes in the underlying securi­
+ty. A delta neutral position may have seriously unneutral characteristics when