Add training workflow, datasets, and runbook

training_data/relevant/text/3972adb5fa4005d592c40567d666f1cf860ade0d96edd8b0f39671e4a3fe2d82.txt

@@ -0,0 +1,37 @@
+308 Part Ill: Put Option Strategies 
+form of an expected return analysis, will be presented in Chapter 28 on mathemati­
+cal applications. 
+More screens can be added to produce a more conservative list of straddl<' 
+writes. For example, one might want to ignore any straddles that are not worth at 
+least a fixed percentage, say 10%, of the underlying stock price. Also, straddles that 
+are too short-term, such as ones with less than 30 days of life remaining, might b<' 
+thrown out as well. The remaining list of straddle writing candidates should be ones 
+that will provide reasonable returns under favorable conditions, and also should be 
+readily adaptable to some of the follow-up strategies discussed later. Finally, one 
+would generally like to have some amount of technical support at or above the lower 
+break-even price and some technical resistance at or below the upper break-even 
+point. Thus, once the computer has generated a list of straddles ranked by an index 
+such as the one listed above, the straddle writer can further pare down the list by 
+looking at the technical pictures of the underlying stocks. 
+FOLLOW-UP ACTION 
+The risks involved in straddle writing can be quite large. When market conditions are 
+favorable, one can make considerable profits, even with restrictive selection require­
+ments, and even by allowing considerable extra collateral for adverse stock move­
+ments. However, in an extremely volatile market, especially a bullish one, losses can 
+occur rapidly and follow-up action must be taken. Since the time premium of a put 
+tends to shrink when it goes into-the-money, there is actually slightly less risk to the 
+downside than there is to the upside. In an extremely bullish market, the time value 
+premiums of call options will not shrink much at all and might even expand. This may 
+force the straddle writer to pay excessive amounts of time value premium to buy back 
+the written straddle, especially if the movement occurs well in advance of expiration. 
+The simplest form of follow-up action is to buy the straddle back when and if the 
+underlying stock reaches a break-even point. The idea behind doing so is to limit the 
+losses to a small amount, because the straddle should be selling for only slightly more 
+than its original value when the stock has reached a break-even point. In practice, 
+there are several flaws in this theory. If the underlying stock arrives at a break-even 
+point well in advance of expiration, the amount of time value premium remaining in 
+the straddle may be extremely large and the writer will be losing a fairly large amount 
+by repurchasing the straddle. Thus, a break-even point at expiration is probably a loss 
+point prior to expiration. 
+Example: After the straddle is established with the stock at 45, there is a sudden rally 
+in the stock and it climbs quickly to 52. The call might be selling for 9 points, even