Add training workflow, datasets, and runbook

training_data/relevant/text/c02d31c87934fee9246b7fe49dcf240c195e4bca6887ba6189767b2310206963.txt

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+is found by subtracting the premium paid, 2.30, from the strike price, 139.
+This is the point at which the position breaks even. If SPY is below $136.70
+at expiration, Isabel has a profit. Profits will increase on a tick-for-tick
+basis, with downward movements in SPY down to zero. The long put has
+limited risk and substantial reward potential.
+An alternative for Isabel is to short the ETF at the current price of
+$140.35. But a short position in the underlying may not be as attractive to
+her as a long put. The margin requirements for short stock are significantly
+higher than for a long put. Put buyers must post only the premium of the put
+—that is the most that can be lost, after all.
+The margin requirement for short stock reflects unlimited loss potential.
+Margin requirements aside, risk is a very real consideration for a trader
+deciding between shorting stock and buying a put. If the trader expects high
+volatility, he or she may be more inclined to limit upside risk while
+leveraging downside profit potential by buying a put. In general, traders buy
+options when they expect volatility to increase and sell them when they
+expect volatility to decrease. This will be a common theme throughout this
+book.
+Consider a protective put example:
+This is an example of a situation in which volatility is expected to
+increase.
+Own 100 shares SPY at 140.35
+Buy 1 SPY May139 put at 2.30
+Although Isabel bought a put because she was bearish on the Spiders, a
+different trader, Kathleen, may buy a put for a different reason—she’s
+bullish but concerned about increasing volatility. In this example, Kathleen
+has owned 100 shares of Spiders for some time. SPY is currently at
+$140.35. She is bullish on the market but has concerns about volatility over
+the next two or three months. She wants to protect her investment. Kathleen
+buys 1 SPY May 139 put at 2.30. (If Kathleen bought the shares of SPY and
+the put at the same time, as a spread, the position would be called a married
+put.)
+Kathleen is buying the right to sell the shares she owns at $139.
+Effectively, it is an insurance policy on this asset. Exhibit 1.7 shows the risk
+profile of this new position.