Options writer

When volatility rises, it is because option writers are more uncertain about the future, and increase their quotations for option premiums. Buyers of straddles—holding both puts and calls—will therefore benefit, as Exhibit 17.26 shows. Here we chart the payoff profile of the original straddle, and compare this with the profile after volatility has risen by 1%. The gap between these lines is around 400,000—the profit generated by the straddle from a 1% increase in volatility. 

When an option is exercised, the option writer will deliver the asset or the cash value of the profit to the buyer. An option trader can take any of the following four positions ... 

The time value of an option is the amount by which the option value exceeds the intrinsic value. Because of the risk they are taking on, illustrated in the payoff profiles above, option writers almost always demand premiums that are higher than the contracts intrinsic value. The value of an option that is out of the money is composed entirely of time value. Time value reflects the potential for an option to move into, or more deeply into, the money before expiry. It diminishes up to the option s expiry date, when it becomes zero. The price of an option on expiry is composed solely of intrinsic value. FIGURE 8.4 lists basic option market terminology. 

Essentially, the premium represents the buyer s expected profit. Like insurance premiums, option premiums depend on how the option writers assess the likelihood of the payout equaling the premium. That, in turn, is a function of the probability of the option being exercised. An option s price is, therefore, a function of the probability that it will be exercised, from which is derived an expected outcome and a fair value. 

If the owner of an option elects to exercise it and enter into the underlying trade, the option writer is obliged to execute under the terms of the contract. The price at which an option specifies that the underlying asset may be bought or sold is the exercise, or strike, price. The expiry date of an option is the last day on which it may be exercised. Options that can be exercised anytime from the day they are struck up to and including the expiry date are called American options. Those that can be exercised only on the expiry date are known as European options. 

Options can thus be likened to a form of insurance taken out against adverse price movements. For this right, the option buyer pays a one-ofif, non-refundable fee (or premium) to the seller (or writer) of the option. The premium is the extent of the buyer s liability in relation to the option. The option writer, in contrast, is exposed to unlimited liability he must be prepared to make or take delivery at the agreed price, whatever may have happened to the market price in the interim period. 

Irene Wilkenfeld is an environmental health consultant, lecturer and writer specializing in issues related to the sick school syndrome. Her consulting company provides in-service training workshops for school districts, educating them about the myriad health hazards in schools and offering efficacious and cost-effective options to detoxify schools. Wilkenfeld also offers phone consultations and personalized research reports to help students, parents and teachers advocate for change and win accommodations. Wilkenfeld is passionate that every school must be a citadel of safety. 

This leaves option 3b to be scrutinised closely. When the present writer did this, he realised that his puzzlement had arisen because he like others, had fallen into the trap of which he had frequently warned his students and which he has emphasised in his writings it is a serious error to attempt to understand electrochemical phenomena by thinking of ions in isolation, because this puts them putatively into a vacuum. But the ions of concern to us do not exist in a vacuum. Ions would not leave their positions of low energy in a crystal lattice to go into solution or be formed from neutral molecules by the transfer of a charged fragment from one molecule to another if those processes were not made exo-energetic by the interaction of the ions with polar or polarisable species in their environment, most commonly the solvent. For that reason, one should always think, and indeed talk, about... 

Using the information in table 1.4, the used-car ad can be divided into five moves. In the first move (included in all six ads), the seller states the essential facts about the car (year, make, and model). In the second move (included in all but two ads), the seller highlights select features of the car (e.g., new tires, air bags, five speeds). In the third move (interchangeable with the second), the writer offers a subjective description of the car (e.g., good cond or fun ). In the fourth move, the writer states the price. Finally, in the fifth move, the seller provides contact information (1) a phone number, (2) a contact name (optional), and (3) when to call (optional). 

Some moves or submoves are not required in all instances. Such moves and submoves are followed by the words if applicable or optional (in parentheses). If applicable indicates that the move is required only when appropriate. For example, if a car has special features, the seller should mention them otherwise, the move should be skipped. Optional indicates that the move is left to the discretion of the writer. For example, in the used-car ad, sellers can decide whether to state their cars condition, their names, or when to call. 

Occasionally, moves or submoves are required only in some instances or are left to the discretion of the writer. We label such moves if applicable and optional, respectively. 

Q Adjusting to a Purpose. For retirees who have strong goals to reach, their living option may be determined by what they hope to achieve. For example, many painters and writers like to live in art colonies. Environmentalists often prefer wilderness locations. Pet lovers seek extra space with few restrictions. In short, a purpose can dictate a special lifestyle, which can influence living accommodations. Is this a priority for you ... 

There are many options a writer can choose when numbering a procedure step. In the past, the trend was to number procedures in what is called legal... 

The mockumentary is one particular comedic story frame the writer has other options to choose from, as well. Comedy runs the gamut from farce, which is principally visual, to more sophisticated forms, where character and dialogue are more important. If the idea is character oriented, what are the characteristics that lend themselves to comic opportunity If they are physical, the comedy is aimed at the character to put it another way, we laugh at the character. If the characteristics are more behavioral, we have a broader band of comic opportunity. We needn t laugh at the character, but we may laugh with the character. How does the source of humor blend with your attitude about the idea If we laugh at your character, in other words, does it undermine or support your idea ... 

There are numerous differences between the long and short film in terms of structure. Most obviously, the proportion of Acts I, II, and III, generally held to be 1 2 1 (30 minutes to 60 minutes to 30 minutes), simply does not apply. Act I is more likely to be 5 minutes in a short film. There will be no middle act there will be Act II or III, depending on the writer s choice of a resolution or an open ending. If the option for resolution is taken, the structure is Act I-Act III, in feature-film terms. If a more open-ended script is the choice, the structure looks like Act I-Act II of the feature film. 

Generally, the tone of the long-form melodrama is realistic. The short film has a much greater tolerance for moving away from realism. Because of the urgency of the character and his goal, or conversely, because of the intensity of the plot, subjectivity and irony both have a place in the melodrama. In this sense, the short film more readily offers the writer the option to enlist his or her voice directly in the script. 

Sentence Variety. A succession of sentences of the same type and length sedates even the most conscientious audience. The technique of sentence combination, explained in books such as The Writer s Options Combining to Composing, can be especially instrumental in helping you to vary your style. 

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