44 lines
1.3 KiB
Plaintext
44 lines
1.3 KiB
Plaintext
495
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OPTION TrAdINg STrATegIeS
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well prefer a long in-the-money call position to a long futures position combined with a protective
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sell stop order. In any case, the key point is that the trader who routinely compares the strategies
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of buying an in-the-money call versus going long futures with a protective sell stop should enjoy an
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advantage over those traders who never consider the option-based alternative.
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FIGURE 35.3c Profi t/loss Profi le: long Call (In-the-Money)
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Price of August gold futures at option expiration ($/oz)
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Futures price at
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time of position
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initiationStrike price
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Breakeven price = $1210.10
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Profit/loss at expiration ($)
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1,000
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10,000
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−10,000
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−15,000
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5,000
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−5,000
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0
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15,000
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20,000
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1,050 1,100 1,150 1,200 1,250 1,300 1,350 1,400
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tabLe 35.3c profit/Loss Calculations: Long Call (In-the-Money)
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(1) (2) (3) (4) (5)
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Futures price at
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expiration ($/oz)
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premium of august $1,100
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Call at Initiation ($/oz)
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$ amount of
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premium paid
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Call Value at
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expiration
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profit/Loss on
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position [(4) – (3)]
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1,000 110.1 $11,010 $0 –$11,010
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1,050 110.1 $11,010 $0 –$11,010
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1,100 110.1 $11,010 $0 –$11,010
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1,150 110.1 $11,010 $5,000 –$6,010
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1,200 110.1 $11,010 $10,000 –$1,010
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1,250 110.1 $11,010 $15,000 $3,990
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1,300 110.1 $11,010 $20,000 $8,990
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1,350 110.1 $11,010 $25,000 $13,990
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1,400 110.1 $11,010 $30,000 $18,990 |