12/11/2023 0 Comments Dril quip stock![]() Since trades have not actually been executed, results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity, and may not reflect the impact that certain economic or market factors may have had on the decision-making process. Specifically, backtested results do not reflect actual trading or the effect of material economic and market factors on the decision-making process. Backtested performance is developed with the benefit of hindsight and has inherent limitations. This information is provided for illustrative purposes only. No representations and warranties are made as to the reasonableness of the assumptions. Certain assumptions have been made for modeling purposes and are unlikely to be realized. Changes in these assumptions may have a material impact on the backtested returns presented. ![]() General assumptions include: XYZ firm would have been able to purchase the securities recommended by the model and the markets were sufficiently liquid to permit all trading. Backtested results are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. Backtested performance is not an indicator of future actual results. This strategy is therefore best used in volatile markets or in anticipation of a major news event that is expected to cause significant price movement.ĭisclaimer: The TipRanks Smart Score performance is based on backtested results. However, if the price of the underlying asset remains close to the strike price as the expiration date approaches, both options could expire worthless, and the trader would lose the entire premium paid for the straddle. While the potential profit for an ATM straddle is theoretically unlimited (since the price of the underlying asset could rise or fall indefinitely), the risk is limited to the total premium paid for both the call and the put options. ![]() The trader profits if the price moves significantly either up or down, covering the total cost of both the call and put options. Traders implement this strategy when they expect a significant price movement in the underlying asset but are uncertain about the direction of this movement. The term "at the money" refers to the situation when the strike price of the options is the same as the current market price of the underlying asset. ![]() An "At The Money" (ATM) straddle is a specific type of options trading strategy that involves simultaneously buying a call option and a put option with the same strike price and expiration date. ![]()
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