StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Project - Assignment Example

Comments (1) Cite this document
Summary
Covered call refers to an instrument in the financial market whereby the seller of call options has corresponding ownership on the amounts of the underlying instruments. Strategies do take place when it comes to covered call especially where the trader buys the underlying…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.4% of users find it useful
Project
Read TextPreview

Extract of sample "Project"

Strategies Using Options al Affiliation GE Company covered call trade Covered call refers to an instrument in the financial market whereby the seller of call options has corresponding ownership on the amounts of the underlying instruments. Strategies do take place when it comes to covered call especially where the trader buys the underlying instruments and at the same time makes a sell on the issue in open market. The underlying instrument is only used to provide the cover as the shares are at certain times delivered to the buyer of call. Writing a call will always generate premium that is paid by option buyer. The writer will have the advantage of keeping his profit once the stock prices rise or remain the same and the writer loses profit if the stock value reduces. The payoffs on the covered call position are related to the short put standing, the premium is the same as of the naked put (Kendrick, 2012).
General electric trade shows the highest potential yields since it has bid premium of $1.14 that yields 12.23% and GE decreased its dividend to $10 from a high of $31 per quarter. Let’s look at the scenarios of pay offs at GE in a minimum span of six months,
One has an alternative of 100 shares at the price of $18.79 and sells the shares in January at $19.00 call at $1.14 per share and after minimum number of days receive $114.00, later on prior to expiration collect $30.00 with almost three times the original expected yield.
Protective Put
Is a risk management strategy for investors that involve use of shares and stocks to guard against the unrealized gains loss. It reduces the investor’s possible gain from the security he owns but is also a form of insurance. In the market the GE has provided certain basis from which investors can make proper analysis, example of which we use here.
An investor purchased a stock of $12 that now is rated at a worth of $24 but has not put it on sell, the unrealized gains can be rated at $12. The investor can as well purchase a put option for the underlying stock if he still believes that he is not ready to sell but is also keen not to lose the gain of twelve. The investor can be able to increase the put option gain if the prices continue to rise and losses when they fall as illustrated in the graph.
Vertical Spread
An option can be said to be a strategy that is used by investors in trading. It involves a simultaneous purchase and sale of two options that are categorized under the same type but have different expiration dates. The two are sold at different strike prices. The payoffs are shown by the narrowing and albeit, widening of the differences that exists between the options premium position (Kendrick, 2012).
General electric’s has given its stock holders such an option in the past and present trading which has become more important in determination of the trends in the stock market. The most common vertical spread has been the bull vertical spread. The bull vertical spread used below shows the company’s profits in relation to payoffs. This has been illustrated in the graph below.
References
Kendrick, L.(2012). Stock Markets and Options, New York NY: McGraw-Hill Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Project Assignment Example | Topics and Well Written Essays - 500 words - 2”, n.d.)
Retrieved from https://studentshare.org/finance-accounting/1642461-project
(Project Assignment Example | Topics and Well Written Essays - 500 Words - 2)
https://studentshare.org/finance-accounting/1642461-project.
“Project Assignment Example | Topics and Well Written Essays - 500 Words - 2”, n.d. https://studentshare.org/finance-accounting/1642461-project.
  • Cited: 0 times
Comments (1)
Click to create a comment or rate a document
hp
hprice added comment 4 months ago
Student rated this paper as
I didn’t know how to start my text. "project" helped me out a lot! Especially the list of first sentence was valuable.

CHECK THESE SAMPLES OF Project

Project

... habits as a means of addressing economic and environmental challenges associated with massive purchase and consumption of goods and services. Reference List Campbell, C. (2005). The Romantic Ethic and the Spirit of Modern Consumerism. Harrisburg: WritersPrintShop. Jackson, T. (2005). Live Better by Consuming Less: Is There a "Double Dividend" in Sustainable Consumption? Journal of Industrial Ecology, 43(6), 23-27. Miles, S. (2008). Consumerism: As a way of life. Indianapolis: Indiana University Press. Pacific Controls. (December 2011). Nationwide Project to cut Power use in Buildings. Khaleej Times. Retrieved from http://www.pacificcontrols.net/news-media/ees-reducing-carbon-footprint-uae.html Reuters (29 June, 2008). UAE Government Warns...
4 Pages(1000 words)Research Paper

Project

... Registration number: The company we are studying is a company we can say it is doing quite well financially. The company has quite a high amount of transactions according to the records presented on its assets, liabilities and even the total transactions that are conducted by the company. The company has recorded an increase in total assets from the year 2010 to the year 2013. In the three year period, the company has doubled on its total current assets. This shows that the company has high competitive abilities that would make it perform in a better manner than any of their competitors. The total long term assets for this company in the year 2010 were recorded to be $86,113,000. As time went on, the company continued improving... Registratio...
4 Pages(1000 words)Essay

Project

... Project Cheating – Plagiarizing Survey Question I believe everyone at Indiana cheats at some point in their courses. ____1____ Project 2 Specification Question 3: Construct a chart given the frequency of response for the 3 questions assigned to your group. Questions assigned to Group: 1. I believe everyone at Indiana State University cheats at some point in their courses. ____ 19. I know of a student who has used their phone to take a picture of an exam. _____ 20. I believe technology advances have made it easier to cheat. _____ Question 7: State in words a research hypothesis comparing males and females, campus and off campus, and lower level versus upper level for your assigned questions. Present your results. Interpret the P value...
1 Pages(250 words)Assignment

Project

... Affiliation Architecture Project Medinet Habu is the that is commonly given to a Mortuary Temple of the Ramses the third. This is a significant structure of the new kingdom period located on a same name location on the West Bank of Luxor within Egypt. Apart from the temple’s artistic and architectural significance as well as its intrinsic size, it is well known as the source of inscribed scenes and reliefs that depict the advent as well as defeat of sea people at the time Ramses the third reigned. The reliefs and scenes in the temple provide good education to people today of the events of the past. This is very significant for historians and those who seek to understand their back ground. The temple does resemble the mortuary temple...
4 Pages(1000 words)Research Paper

Project

...from a remarkable health care health care insurance package. This consists of the wellness reimbursement program and employee assistance plan. Second, The Company has great support for career development. Reason being, they support educational reimbursement projects that enhances performance and growth. Third, the company enhances lasting security for their employees through Thrift Plan. Whereby, Fidelity Investment and the pension plan manage contributions. Fourth, in a need to facilitate a balance between personal life and work employees have access to flexible work plans. In addition, both employees in contract and full-time can go on leave of up to twelve weeks. Finally, MPC pays its staff whether on vacation and...
13 Pages(3250 words)Essay

Project

... Breaking social norm experiment There are certain rules set by the society about how people should behave. However, these rules unwritten, they are important in showing how we relate to each other in the society (Durlauf and Blume 112). There are several instances when I come encounter people breaking or feeling weird when some is breaking these social norms. There are things that the society considers wrong, for instance, wearing clothes backwards. Ideally, this is not wrong, but it would feel so abnormal to wear clothes backwards. This is what social norms are all about. I am motivated to try to understand exactly the concept of social norms in the society. I want to prove if it is true that people value these social norms... Breaking...
2 Pages(500 words)Admission/Application Essay

Project

... Question Depreciation Straight line Purchase Cost $85,000 Installation cost $800 Set up cost $4,000 Residual value $12,000 Cost basis 85,000 + 4,000 + 800 = $89,800 Number of periods 7 years Depreciation = cost basis – residual value = $89,800 - $12,000 =$77,800 Depreciation per year = = = $11,114 per year Straight line depreciation schedule Cost basis depreciation Accumulate depreciation Net Book Value Year 1 $89,800 $11,114 $11,114 $78,686 Year 2 $89,800 $11,114 $22,228 $67,572 Year 3 $89,800 $11,114 $33,342 $56,458 Year 4 $89,800 $11,114 $44,456 $45,344 Year 5 $89,800 $11,114 $55,570 $34,230 Year 6 $89,800 $11,114 $66,684 $23,116 Year 7 $89,800 $11,114 $77,798 $12,002 Units of production method Production... Question...
5 Pages(1250 words)Statistics Project

Project

... that the organization functions. The innovation produces effectiveness and efficiency in the processes of business production; the information handling is essential. The technological as well as development research course produces a quality level that the business gets competitiveness and differentiation in the structure, even though this demands, noteworthy but essential investments. 3 The Problem/Opportunity 3 The Proposed Solution 4 Scope and Constraints 4 Fact – Finding Techniques 5 To study the system the analyst needs to do collect facts and all relevant information. The facts when expressed in quantitative form are termed as data. The success of this project is depended upon the accuracy of available data. Accurate information can...
20 Pages(5000 words)Assignment

PROJECT

...Restructure of an Organization al Affiliation Introduction Leaders in an organization may find it necessary to change the organizational structure for a number of reasons such as; addressing budgetary factors, increasing effectiveness of the organization, reducing operational costs, introduction of new programs and changing priorities in unit production. Organizational change is one of the most difficult ideologies since it is met with internal and external resistance in the organization. The staff normally resists any changes within the organization especially if the working conditions are favorable. Decreasing the labor force in an organization is a serious case since no employee will volunteer in any way towards this exercise... of an...
4 Pages(1000 words)Assignment

Project

...Part 1. The diagram above shows the scatterplots for the consumption of coffee and sodas over a period of 48 days. From the diagram we wtiness thatthe consumption of coffee was steady for the first twenty days before it picked in between the 21st to the 24th days. In the case of sodas, the consumption is erratic with changing consupmtion especially in the first 30 days. From the 30th day, the consumption goes to higher levels with the same erratic trend. 2. The figure above shows the results of the regression model conducted on the consumption of sodas over a 48 day period. From the regression model we get to know that 42% of the data fits the goodness of fit test. Therefore, we can conclude that time used in this dataset does... 1. The...
6 Pages(1500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Assignment on topic Project for FREE!

Contact Us