Posted: January 1st, 2020
Option Trading Strategies – Part 2
part 1 was already finished and attached in the file————-
Option Trading Assignment
Make sure that you choose a company for which a large number of options are traded and in particular, there are MULTIPLE options with an October 20, 2017 maturity. You may not choose a company that does not have MULTIPLE options traded with an October 20, 2017 maturity.
First verify that there are options traded for your company with an October 20, 2017 maturity. Go to Yahoo finance and print the following (make sure you have two copies, one for Professor Mooradian and one for you to keep. It is very important that you keep a copy.): the current stock price, the current option premiums (or prices), both bid and ask (You sell at the bid and buy at the ask.), for all options (all strike prices and all calls and puts) with an Oct 20 maturity.
The first part of your assignment is complete when you turn in your print out with the current stock price and all of the current option premiums (or prices) with Oct 20, 2017 maturity only
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—————— the company i chose is Micron Technology _MU
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””””Start from here!!!!!!
The second
part
of the assignment is to research your company. You will not want any ancient history. Very old historical information about your company is unhelpful. When researching your company, keep in mind what you learned about market efficiency in your Investment Analysis class. What you want to find are any indicators or clues (all very recent information) about near future stock price changes. Is there any new information about the company that is likely to be announced between mid-Sept and Oct 20, the maturity date of the options? If so, what is it? This is the basis for your beliefs (or forecast) of the stock price on Oct 20.
Note that your research is very critical in determining your beliefs; however, you do not include your research in your Sept 27 deliverable.Your research will be the basis for your beliefs; however, your research will only become part of your presentation that will come after Oct 20.
DUE Sept 26: You must turn in a brief statement which states your beliefs about your company’s stock price on Oct 20. Your beliefs must state 2 prices, prices that are also (or close to) strike prices on options for this stock. Examples of what you might state include the following: 1) We expect the stock price (if for example currently $20) to increase to above $25 or to fall below $15. 2) We expect the stock price to increase to between $25 and $30. 3) We expect the stock price to decrease to between $10 and $15. 4) We expect the stock price to remain between $18 and $22. 5) We expect the price to increase to above $25 or decrease to below $15 but the decrease is more likely. THIS WILL BE YOUR PRIOR BELIEFS. Note that you do not need to include your research in this deliverable, but it is advisable to do your research before setting your prior beliefs. Once set, you cannot change your beliefs and they will determine whether your strategy is successful.
On Oct 20 you will need to get the stock price for your stock to be able to calculate the payoff on all expiring options.
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——————————–finish only part 2 please!! around 400 words.
if you are interested in doing the later parts—let me know!—-
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