Professor：Shang-Tsair Chang
Author：Ting-Yu Lin
To purchase the underlying
 Long Straddle
 12/5 February put options as the main
 Buy 7400 101 point x2
Sell 7200 56 point x1
7600 185 point x1
Graphic
Sell 7200 + Buy 7400
200
100
0
7000
7200
7400
7600
-100
Sell 7200 + Buy 7400
 When the maturity date of the underlying price is less than
7200, there will be a maximum profit 155 points.
 When the maturity date of the underlying price is greater
than 7400, there will be a maximum loss of 45 points.
 When the underlying price equal to the 7355 maturity, the
breakeven point.
Graphic
Buy 7400 + Sell 7600
100
0
7200
7400
7600
7800
-100
-200
Buy 7400 + Sell 7600
 When the maturity date of the underlying price is less than
7400, there will be a maximum loss of 116 points.
 When the maturity date of the underlying price is greater
than 7600, there will be the most profitable 84 points.
 When the maturity date of the underlying price equal to
7516, the breakeven point.
Graphic
Straddle
100
0
7000
7200
7400
7600
7800
-100
-200
 When the maturity date of the underlying price is less than 7200, there
will be a maximum profit of 39 points.
 When the maturity date of the underlying price is greater than 7600,
there will be a maximum profit of 39 points.
 When the maturity date of the underlying price is equal to 7400, there
will be a maximum loss of 161 points.
 When the maturity subject of price equal 7239,7561, breakeven point.
Analysis
 The timing of the use of long straddle trading strategy
is expected to choose the right subject matter before
the due expiry date, will have significant price changes,
not the rose is used in a slump.
 When possible, the time value of the underlying
commodity prices in general exhibited stalemate does
not move, there is zero option loss will gradually eat
the cost paid.
Analysis
 At that time the TAIEX nearly points to 7653 points,
the index is expected after the drastic changes.
February index to maintain maximum profit occurs,
then 7653 points or large fallen to 7239 following 39
points, but the maximum profit can be first profitable
side of the first open maturityday time, maybe the
index reversal, you can earn a profit at the same time,
to achieve a win-win opportunity.
Forecast