33 lines
1.0 KiB
Plaintext
33 lines
1.0 KiB
Plaintext
692 Part V: Index Options and Futures
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FIGURE 34-3.
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January soybean, heavily ratioed spread.
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90
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60
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30
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- 0
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e 575 625 650 675 725 a. -30 0
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.1!l -60 C
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~
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-90
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-120 At Expiration
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-150
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-180
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Futures Price
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FOLLOW-UP ACTION
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The same follow-up strategies apply to these futures options as did for stock options.
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They will not be rehashed in detail here; refer to earlier chapters for broader expla
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nations. This is a summary of the normal follow-up strategies:
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Ratio call spread:
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Follow-up action in strategies with naked options, such as this, generally involves
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taking or limiting losses. A rising market will produce a negative EFP.
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Neutralize a negative EFP by:
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Buying futures
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Buying some calls
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Limit upside losses by placing buy stop orders for futures at or near the upside
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break-even point.
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Put backspread:
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Follow-up action in strategies with an excess of long options generally involves
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taking or protecting profits. A falling market will produce a negative EFP.
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Neutralize a negative EFP by:
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Buying futures
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Selling some puts |