Add training workflow, datasets, and runbook
This commit is contained in:
@@ -0,0 +1,24 @@
|
||||
Cotnbining Calendar
|
||||
and Ratio Spreads
|
||||
The previous chapters on spreading introduced the basic types of spreads. The sim
|
||||
plest forms of bull spreads, bear spreads, or calendar spreads can often be combined
|
||||
to produce a position with a more attractive potential. The butterfly spread, which is
|
||||
a combination of a bull spread and a bear spread, is an example of such a combina
|
||||
tion. The next three chapters are devoted to describing other combinations of
|
||||
spreads, wherein the strategist not only mixes basic strategies ..:... bull, bear, and calen
|
||||
dar - but uses varying expiration dates as well. Although they may seem overly com
|
||||
plicated at first glance, these combinations are often employed by professionals in the
|
||||
field.
|
||||
RATIO CALENDAR SPREAD
|
||||
The ratio cdendar spread is a combination of the techniques used in the calendar
|
||||
and ratio spreads. Recall that one philosophy of the calendar spread strategy was to
|
||||
sell the near-term call and buy a longer-term call, with both being out-of-the-money.
|
||||
This is a bullish calendar spread. If the underlying stock never advances, the spread
|
||||
er loses the entire amount of the relatively small debit that he paid for the spread.
|
||||
However, if the stock advances after the near-term call expires worthless, large prof
|
||||
its are possible. It was stated that this bullish calendar spread philosophy had a small
|
||||
probability of attaining large profits, and that the few profits could easily exceed the
|
||||
preponderance of small losses.
|
||||
The ratio calendar spread is an attempt to raise the probabilities while allowing
|
||||
for large potential profits. In the ratio calendar spread, one sells a number of near-
|
||||
222
|
||||
Reference in New Issue
Block a user