Stock Trak Reporting Long One Future Contract For Buying

Stock Trak Reporti Long One Future Contractfor Buying Long Future P

Stock Trak Report: I) Long one future contract: For buying long future position, I bought 10 Construct Timber contracts for May 18 for $519.00. I bought this contract because, based on the statistics from stock-trak, I thought that the price will continue to go up. Overall, I made no profit, which is $0 (based on I calculate like this: 10*110,000($0-$0)).

II) Short one future contract: For short future contract, I sell twelve crude oil contracts for $61.77. I short it because I saw that the price for this position starting to drop. I figure that it will be a good time for me to sell it before I lose money. As a reward, I made $4,320 for selling it.

III) Long mutual fund and hedge with one mini S&P index future contract: I collected weekly FDGRX mutual prices and S&P prices. I regressed weekly FDGRX mutual fund continuous weekly return against the S&P continuous weekly return. The explanatory variable coefficient, which is beta, is 1.81633. On February 28, 2018 I bought 393 mutual fund contracts for $192.82. During that day, I sell S&P E-mini 500 contract for $2,751.75. On April 14, 2018 I saw that both of their prices are going down. At this time, I decided to hedge both of these positions by selling Fidelity Growth Co Fund and S&P E-mini 500. For selling S&P I gain $4,700 while I have a loss of $809.58 for FDGRX. Overall, I get $3,890.42 net profit for shorting both of these positions. If I have not hedge both of them I would have a loss of $809.58 because I let the price for FDGRX continue to go down and S&P mini 500 price hits zero. Between these two strategies hedging will be my best option.

IV) Long one Call option: I bought Best Buy Co. as a call option for $2.24. When I do some research about this corporation stock price, I assume the price will go up. However, my prediction is wrong when its stock price drop to zero on April 14. So I loss $2.24 with -100% of return. If I short it, I will gain about $2.24.

V) Long one put option: I bought AT&T Inc. as long put option position. I long this option since I assume that its stock price to go above strike price. I also bought it because I expect this corporation to be well-known that they are capable to make a lot of profit. On March 12, 2018 I sell five option contracts on AT&T for $0.64. By the time the price reach to $1.33 I decided to make this position a long call option. As a result, I make $9.85 profit with 108% of the return I earned. If I remain short call position, I would probably have a loss.

VII) Long one stock 100 shares and write a call option on this stock with K higher than stock price: On April 2, 2018 I bought Advanced Micro Device Inc. stock at $9.96 for 100 shares. I believe that this stock price will continue to grow, so it made me decide to invest this company. At the same time I sell this stock as a call option for ten shares. Overall, I have a loss of $996.10 with a loss of 100% return.

Below are the detailed transactions and positions:

  • Market - Cover AT&T Inc US 5 1 USD Options $1.33 4/21/2018
  • Market - Sell Best Buy Co Inc US -1 1 USD Options $0.00 4/21/2018
  • Market - Cover Advanced Micro Devices Inc US 10 1 USD Options $0.00 4/14/2018
  • Market - Buy FIDELITY GROWTH CO FUND US 1. USD MutualFunds $182.88 4/6/2018
  • Market - Short Advanced Micro Devices Inc US -10 1 USD Options $0.01 4/2/2018
  • Market - Buy CONSTRUCT. TIMBER MAY 18 US 10 1 USD Futures $519.00 4/2/2018
  • Market - Short GBP/USD JUN 18 US -10 1 USD Futures $1.41 4/2/2018
  • Market - Buy Advanced Micro Devices Inc US USD Equities $9.96 4/2/2018
  • Market - Cover SOYBEANS OIL MAR 18 US 12 1 USD Futures $0.31 3/15/2018
  • Market - Buy Best Buy Co Inc US 1 1 USD Options $2.24 3/12/2018
  • Market - Short AT&T Inc US -5 1 USD Options $0.64 3/12/2018
  • Market - Buy FIDELITY GROWTH CO FUND US USD MutualFunds $192.82 2/28/2018
  • Market - Short S&P E-MINI 500 IDX JUN 18 US -1 1 USD Futures $2,751.75 2/28/2018
  • Market - Sell CRUDE OIL MAR 18 US -12 1 USD Futures $61.77 2/21/2018
  • Market - Short SOYBEANS OIL MAR 18 US -12 1 USD Futures $0.31 2/20/2018
  • Market - Buy CRUDE OIL MAR 18 US 12 1 USD Futures $61.41 2/16/2018

These transactions represent a comprehensive snapshot of my trading activities, including futures, options, stocks, and mutual funds, with strategic hedging to mitigate losses and optimize gains based on market movements and predictive analysis.

Paper For Above instruction

This report provides a detailed analysis of my trading strategies and positions within the Stock Trak simulation, emphasizing the rationale behind each trade, the market conditions at the time, and the outcomes achieved. The report demonstrates an understanding of futures contracts, options, mutual funds, and stock trading, as well as the application of hedging techniques to manage risk effectively.

The first position was a long futures contract on Construct Timber, with the purchase driven by optimistic market statistics suggesting rising prices. Despite the strategic expectation, the transaction yielded no profit, reflecting the unpredictable nature of commodities markets. Futures trading requires careful analysis and timing, and this trade exemplifies the risks inherent in speculative investments.

In contrast, my short position on crude oil futures profited from a decline in price, illustrating successful market timing and directional expectations. Selling twelve contracts at $61.77 resulted in a profit of $4,320, highlighting the potential for gains in bearish market conditions when accurately predicting price movements.

To hedge my exposure to market volatility, I engaged in a combined position involving mutual funds and the S&P E-mini futures contracts. By conducting a regression analysis, I determined a beta of 1.81633, indicating the mutual fund's sensitivity to market movements. On February 28, 2018, I purchased 393 mutual fund units and sold a corresponding S&P futures contract. When market prices declined in April 2018, I hedged these positions by selling both assets, securing a net profit of $3,890.42. This hedging strategy exemplifies prudent risk management by offsetting potential losses due to adverse price movements.

My options trading involved both call and put positions, with my predictions subject to market volatility. I purchased a call option on Best Buy at $2.24, anticipating a rise in stock price, which ultimately failed as the stock dropped to zero. This resulted in a total loss equal to the premium paid, underscoring the risk of options strategies relying heavily on correct market direction.

Conversely, my long put option on AT&T proved profitable when the stock price increased from $0.64 to $1.33, leading to a profit of $9.85 and a return of 108%. This trade illustrates the advantage of correctly anticipating downward or upward stock movements, leveraging option positions for substantial gains.

Further, I invested in stock by purchasing 100 shares of Analog Micro Devices (AMD) at $9.96, expecting growth. To generate additional income, I wrote a call option with a strike price higher than the current stock price. Unfortunately, the stock's decline resulted in a total loss of $996.10, indicating the risks associated with holding stocks while simultaneously writing covered calls in a declining market.

Market transactions also included significant futures trades, such as shorting soybean oil and crude oil, while hedging positions to mitigate losses. The detailed transaction record reflects strategic decision-making supported by market research and regression analysis, aiming to balance risk and return.

Overall, my trading approach combined aggressive speculation with risk management through hedging, diversification across asset classes, and tactical entry and exit points based on market conditions. This approach highlights the importance of market analysis, timing, and risk mitigation in successful trading strategies within the simulation environment.

References

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