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No.(*) Some equity option exchanges trade complex options, which are securities consisting of multiple individual option 'legs' or stocks, but not options where the underlying security is also an option. (*) Exchanges do from time to time try new types of instrument hoping they will get sufficient interest, so perhaps at one point on the floor of an ...


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Delta is the change in the price of the option for a unit change in the price of the underlying instrument. The trader has shorted 10,000 puts each of which has a delta of -0.50, so the total delta is +5,000 (short puts have a positive delta). To offset this, the trader should short 5,000 shares of the underlying (short stock has a delta of -1.00). If we ...


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For starters, 1 option contract controls 100 shares unless it is an adjusted option. The directional risk for short puts is a gain in one direction and a loss in the other direction. Google for the specifics. Calculate the net delta of the option position and then determine how many shares you must buy (or sell) to offset that delta.


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In short, there is no way to find out exactly the language of these contracts, but they're total return swaps. Although, in this particular case they may be a little non-standard given the 3x leverage. Possible high-level structure of the total return swap: UPRO agrees to swap some multiple (typically 1x but in this case it could be 3x) of S&P 500 ...


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Perhaps UPRO has agreed with these financial institutions that at some future point in time, UPRO will pay the institution $300,000,000 and the institution will pay UPRO $100,000 times value of the S&P 500 index. It's similar, but the cash flows will be more periodic, even daily. In a swap, one side pays a fixed amount while the other side pays a ...


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All else equal, a put with a higher strike will have a more negative delta than a put with a lower strike. If an investor buys a high strike put and sells a low strike put, it is a negative exposure to the underlying. Options trading can be risky and can cause significant losses. Options trading is not appropriate for some investors. The above is not ...


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(A) buys a call to open from counter party (B) who sells the call to open. There are four possible outcomes: The contract is OTM at expiration and expires worthless (A) exercises the ITM call to buy the stock from (B) (A) sells his call to (C) and the counter parties are now (B) who is short the call and (C) who is long No one does anything and the call ...


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By selling-to-close the original buy-to-open position with the exact same contract, you are creating offsetting positions. Imagine there is only one options contract in the universe. You bought it from person A whom sold it to you (let's assume they sold to open) and you sell it to person C. You no longer have any obligations wrt to this contract but person ...


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Margin Not only do you have to pay an initial margin, but also further margin calls should the price of the underlying drop below the maintenance level: https://www.thebalance.com/all-about-futures-margin-on-futures-contracts-809390 Delivery Regarding delivery, all futures contracts with delivery (as opposed to purely electronic settlement, such as with ...


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One of the legal entities on a futures contract is fixed - the writer of the contract. This is the entity who originated the contract and is usually a producer for commodities contracts or a bank or broker for financial futures. The other entity is essentially "bearer" meaning that the holder at expiry is the one who fulfils the other party to the contract. ...


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All storage at Cushing has been contracted for. The price drop isn't just reflective of the price of storage, but primarily of the scarcity of storage. Read the Storage & Transportation section of this answer for a longer explanation. There is no sticker price for storage at Cushing. There might have been in a different environment when it only served a ...


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I suspect the most economical way to store oil is to store it in a cave / tunnel. Preferably an old cave / tunnnel, because the construction costs have been already paid (or there is no construction cost if it's a natural cave). But, there is a limited number of old caves and tunnels so at some point of time new tunnels need to be constructed. Look at https:...


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A futures contract is a contract to buy a commodity (or stock, or whatever) for a specified price at a specified time. So if you enter into a contract at a certain price, that's the price you'll pay. The market (spot) price is irrelevant (other than to measure opportunity cost or to determine how much it costs you to get out of the contract at the last ...


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