62 lines
959 B
Plaintext
62 lines
959 B
Plaintext
316
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TABLE 20-3.
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Results of a combination write.
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Stock Price at Coll
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Expiration Profit
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40 +$ 400
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50 + 400
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53 + 400
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57 + 400
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60 + 400
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65 + 400
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70 + 400
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73 + 100
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77 300
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80 600
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90 - 1,600
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FIGURE 20-3.
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Sale of a combination.
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C:
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~ +$700
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·5.
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X
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UJ
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rn
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en en
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0 ....I
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ci
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e a..
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$0
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Put
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Profit
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$1,700
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700
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400
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0
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+ 300
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+ 300
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+ 300
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+ 300
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+ 300
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+ 300
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+ 300
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Stock Price at Expiration
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Part Ill: Put Option Strategies
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Total
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Profit
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-$1,300
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300
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0
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+ 400
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+ 700
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+ 700
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+ 700
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+ 400
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0
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300
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- 1,300
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At first glance, this may seem to be a more conservative strategy than straddle
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writing, because the profit range is wider and the stock needs to move a great deal to
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reach the break-even points. In the absence of follow-up action, this is a true obser
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vation. However, if the stock begins to rise quickly or to drop dramatically, the stran
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gle writer often has little recourse but to buy back the in-the-money option in order |