Add training workflow, datasets, and runbook

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282 Technical Analysis of Stock Trends
Having correctly analyzed market trends, your action results in an increase in portfolio
value from $418,000 to $429,375. You could have accomplished the same result by buying and
selling bonds and stocks, but not without tax consequences and the attendant transaction
headaches. The use of futures to accomplish your goals allowed you to implement your
trading plan without disturbing your existing portfolio.
Perspective
Although there can be no argument about the importance of CBOT® DJIASM Index futures—
they are markets of enormous usefulness and importance—there can also be no doubt the
futures novice should thoroughly prepare himself before venturing into these pits. In such
a highly leveraged environment, mistakes will be punished much more severely than an
error in the stock market. By the same token, ignorance of this vital tool is the mark of an
investor who is not serious about his portfolio, or who is less intense in his investment
goals. “They” (the infamous “they”) use all the weapons at their disposal; so should “we.”
Options on Dow Index futures
The buyer of this instrument has the choice, or the right, to assume a position. It is his option
to do so—unlike a futures contract in which he has an obligation once entered. There are
two kinds of options: calls (the right to buy the underlying instrument) and puts (the right
to sell). Also, options can be bought (long) or sold (short) like futures contracts.
A long call option on Dow Index futures gives the buyer the right to buy one futures
contract at a specified price which is called the “exercise” or “strike” price. A long put option
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/DI200006 LAST-Daily 02/24/2000
Created with TradeStation www.TradeStation.com
Figure 17.4 DowJones Futures and Options. A put purchased at the arrow on the break would have
protected patiently won gains over the previous 11 months. The increase in the value of the put can
be seen as futures track declining Dow cash. A theoretical drill, but theoretical drills precede actual
tactics in the market.