Spread Strategies von Edu Pristine

Dozent des Vortrages Spread Strategies

Edu Pristine

Trusted by Fortune 500 Companies and 10,000 Students from 40+ countries across the globe, EduPristine is one of the leading International Training providers for Finance Certifications like FRM®, CFA®, PRM®, Business Analytics, HR Analytics, Financial Modeling, Operational Risk Modeling etc. It was founded by industry professionals who have worked in the area of investment banking and private equity in organizations such as Goldman Sachs, Crisil - A Standard & Poors Company, Standard Chartered and Accenture.

EduPristine has conducted corporate training for various leading corporations and colleges like JP Morgan, Bank of America, Ernst & Young, Accenture, HSBC, IIM C, NUS Singapore etc. EduPristine has conducted more than 500,000 man-hours of quality training in finance.
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... options for the same underlying and carrying the same maturity but having a higher strike price. A vertical spread. Motivation: Downside protection by agreeing to a limit to the upside profits. Expectation: Moderate rise ...

... sale of the same put options at a lower strike price. A vertical spread. Motivation: Downside protection by agreeing to a limit to the upside profits. Expectation: Moderate fall in the price ...

... Call Butterfly can be established by selling two at the money calls with strike price say P, buying one out of money call at price say P+X and buying another in the money call at price say P-X. Motivation: To profit even when the ...

... underlying stocks Straddle. Involves purchasing same quantity of at the money call and put options carrying the same strike price and same maturity. Motivation: To profit from wide variations in the price of the underlying, ...

... carry the same strike price and same maturity. More bullish version of the straddle. Motivation: To profit from wide variations in the price of the underlying, even though the direction of the movement in price is uncertain. Expectation: Large change ...

... options carry the same strike price and same maturity. Bearish version of the straddle. Motivation: To profit from wide variations in the price of the underlying, even though the direction of the movement in price is uncertain. Expectation: Large change ...

... of the same underlying carrying the same maturity. Motivation: To profit from wide variations in the price of the underlying, even though the direction of the movement ...

... A. No strategy would result in a risk-free profit. B. Buy the put, sell the call and buy the futures cont ract. C. Buy and exercise ...

... of USD 45 for USD 3 and buys a June 2008 call of ABC Limited with a strike price o f USD 40 for USD 5. What is the name of ...

... Motivation. Protection against loss in the value of stocks owned Expectation. Rise in the price of the underlying Advantage. Trader profits from the rise ...

... price of the underlying Profit Potential. Maximum Profits when the trader is able to exercise the option purchased, i.e. the spot price is greater than the strike price of the option written. Difference in Strike ...

... Spread Strategies (cont.) 50 Bull Call Spread -4 ...

... underlying Profit Potential. Maximum Profits when the trader is able to exercise the option purchased, i.e. the spot price is lower than the strike price of the option written. Difference in Strike Prices ...

... Spread Strategies (cont.) 52 Bear Spread -4 -2 ...

... the underlying is range bound and limit losses in case it moves beyond the expected bound Expectation. Not much change in the price of the underlying Profit Potential. Profits translate when the stock price remains with in the bounds indicated by the ...

... Spread Strategies (cont.) 54 Butterfly Spread -4 -2 ...

... even though the direction of the movement in price is uncertain Expectation. Large change in the price of the underlying Profit Potential. Profits translate when any one of the options can be exercised ...

... Strategies (cont.) 57 Straddle -2.5-2.0 -1.5 -1.0 -0.5 0 ...

... the price of the underlying, price expected to increase more than decrease Profit Potential. Profits translate when any one of the options can be exercised and the resultant pay-off is greater than the premium paid for establishing the position. Profit potential ...

... Strategies (cont.) 59 StrapStrap Profits -5.0-4.0 -3.0 -2.0 -1.0 ...

... the price of the underlying, price expected to decrease more than increase Profit Potential. Profits translate when any one of the options can be exercised and the resultant pay-off is greater than the premium paid for establishing the position. Profit potential ...

... Strategies (cont.) 61 Strip -5.0-4.0 -3.0 -2.0 -1.0 0 ...

... is uncertain Expectation. Large change in the price of the underlying Profit Potential. Profits translate when any one of the options can be exercised and the ...

... Combination Strategies (cont.) 63 Long StrangleStrangle Profits ...

... Box Spread yields us Risk-free rate 64 Bull Call Spread ...

... associated American 260 call option is at 16 and the associated 260 American put option is at 3. Which of the following strategies would you select to lock ...

... and the maximum profit and loss the invest or could incure? A. Bear Spread, Maximum Loss USD 2, Maximum Profit USD 3. B. Bull Spread, Maximum Loss Unlimited, Maximum Profit USD 3. ...