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author | lxf <sng@luxagraf.net> | 2024-09-21 16:28:35 -0500 |
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committer | lxf <sng@luxagraf.net> | 2024-09-21 16:28:35 -0500 |
commit | 32a9e295b70fa0dfc795986fab3570190f2dbf77 (patch) | |
tree | 1dd2911bb4e0a1a5d768a0de1e9b03a1f355a2a5 /trad.txt |
initial commit of streamlined docs folder
Diffstat (limited to 'trad.txt')
-rw-r--r-- | trad.txt | 25 |
1 files changed, 25 insertions, 0 deletions
diff --git a/trad.txt b/trad.txt new file mode 100644 index 0000000..e68d639 --- /dev/null +++ b/trad.txt @@ -0,0 +1,25 @@ +Can you check my math? +Buy $114 calls at $1.15 with delta 0.50 +25% stop on calls is $0.87 (1.15 x 0.25 = 0.28 and 1.15 - 0.28 = 0.87) + +--correct + +Stop on stock price $112.26 (.87/delta 0.50 = $1.74 move in price, therefore 114 - 1.74 = 112.26) +25% profit on calls $1.43 (1.15 + 0.28) +25% profit for stock price $116.86 (1.43/delta 0.50 = 2.86 move in stock price, therefore 114 + 2.86 = $116.86) + +--So the stop on the option is .28 cents lower. A delta of .50 means that for every $1.00 the stock moves, the option will move .50 cents. So, if we only want the option to move .28 cents, then that would mean a .56 cent move in the stock price. .28 / .50 = .56 so, the stop on the stock would be ~113.44 + +--Profit of 25% is ~.28 cents higher on the option, so .28 / .50 = .56 so the target for the first sale would be ~$114.5 + +6.10 x .25 = 1.54 +6.10 - 1.54 = 4.56 + +1.54 / .5 + +calc 2.81*.25 +calc 2.81-70 = 2.11 + +calc 2.11/.45 + +calc 71.76-4.68 |