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On average, selling the at-the-money put option each month earned a premium of 1.65% of the notional value of the index, which averaged 19.8% per year. The income return of 19.8% exceeds the total return of 10.3%, as a portion of premiums are paid to insure losses of the put buyers.
In finance, the expiration date of an option contract (represented by Greek letter tau, τ) is the last date on which the holder of the option may exercise it according to its terms. [1] In the case of options with "automatic exercise", the net value of the option is credited to the long and debited to the short position holders.
Because options prices are automatically updated as soon as the underlying stock price changes, the potential existed to update at five times as many price points. [3] Dollar Strikes: The standard stock option strike prices are in increments of $2.50 at and below $25, and in $5.00 increments for strikes above $25. A Dollar Strike Program would ...
An example of a physically settled contract is U.S.-listed exchange-traded equity options. Delivery settles in two business days. It is the most common form of settlement. Physically settled options are mostly American style. [2] Cash settlement – Cash-settled options do not require the actual delivery of the underlier. Instead, the market ...
Profit diagram of a box spread. It is a combination of positions with a riskless payoff. In options trading, a box spread is a combination of positions that has a certain (i.e., riskless) payoff, considered to be simply "delta neutral interest rate position".
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A linear chart of the S&P 500 daily closing values from January 3, 1950, to February 19, 2016 A logarithmic chart of the S&P 500 index daily closing values from January 3, 1950, to February 19, 2016 A daily volume chart of the S&P 500 index from January 3, 1950, to February 19, 2016 Logarithmic Chart of S&P 500 Index with and without Inflation and with Best Fit and other graphs to Feb 2024
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