Fidelity Advisor Energy Class C · NASDAQ:FNRCX
Fidelity Advisor Energy Class C — Fidelity Investments — Conference Presentation (2016)
16 slides from Fidelity Advisor Energy Class C's conference presentation, 2016
Slide 1: Synthetic Option Positions: Why and How They Are Used
Webinar Presentation Synthetic Option Positions: Why and How They Are Used Presented by: Trading Strategy Desk 1 Fidelity Brokerage Services, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917. © 2016 FMR LLC. All rights reserved. 768864.2.0
Slide 2: Disclosures
Disclosures Options’ trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read Characteristics and Risks of Standardized Options, and call 800-544- 5115 to be approved for options trading
Slide 3: Goals of Today's Session
Goals of Today’s Session • Learn the basic synthetic option positions – Synthetic Long Stock – Synthetic Short Stock – Synthetic Long Call – Synthetic Short Call – Synthetic Long Put – Synthetic Short Put • How an understanding of synthetic positions can help with making adjustments and managing ris
Slide 4: Profit/Loss of Synthetics Components
Profit/Loss of Synthetics Components 4
Slide 5: Greeks of Synthetics Components
Greeks of Synthetics Components Long stock + NA NA NA Short stock -- NA NA NA Long call + + -- + Short call -- -- + -- Long put -- + -- + Short put + -- + -- Greeks are mathematical calculations used to determine the effect of various factors on options. 5
Slide 6: How do you create synthetic long stock?
How do you create synthetic long stock? Trader’s note: Synthetic long stock uses at-the-money strike calls and the same expiration at-the-money strike puts. However, different strikes may be used as well. You can read more about a bullish split-strike synthetic here: https://www.fidelity.com/learnin
Slide 7: How do you create synthetic short stock?
How do you create synthetic short stock? Trader’s note: Similar to synthetic long stock, synthetic short stock also uses at-the-money strike calls and the same expiration at-the-money strike puts. Once again, different strikes may be used. You can read more about a bearish split-strike synthetic her
Slide 8: How do you create a synthetic long call?
How do you create a synthetic long call? Trader’s note: An investor or trader holding long stock can hedge against downside risk by buying a put, creating a protective put position. If you buy stock and buy a put on the same trading day, you have created a specific type of protective put called a ma
Slide 9: How do you create a synthetic short call?
How do you create a synthetic short call? Trader’s note: You may be noticing a pattern. Each basic synthetic position is comprised of two components. If you already have one of the two, you can quickly alter your risk exposure by adding the other one. Understanding synthetic relationships can be a v
Slide 10: How do you create a synthetic long put?
How do you create a synthetic long put? Trader’s note: A bearish trader can hedge his short stock against a rally in the stock price by buying a call. A bullish trader can flip his long call into a bearish trade by shorting stock. In either case, they have created the risk/reward profile of a long p
Slide 11: How do you create a synthetic short put?
How do you create a synthetic short put? Trader’s note: What option strategy involves writing calls against long stock? A covered call! Many traders will write cash covered puts and if they get assigned the stock, begin to write calls against their shares. 11
Slide 12: Synthetic Relationships
Synthetic Relationships Original Position = Synthetic Equivalent Long Stock = Long Call + Short Put Short Stock = Short Call + Long Put Long Call = Long Stock + Long Put Short Call = Short Stock + Short Put Long Put = Short Stock + Long Call Short Put = Long Stock + Short Call Fidelity Brokerage Ser
Slide 13: Taking it to the next level - Comparisons
Taking it to the next level - Comparisons • What’s the difference between a bull call spread and a bull put spread? • Bullish vertical spreads can be constructed with calls or puts • Buy lower strike, sell higher strike • Bull call spreads are debit spreads and Bull put spreads are credit spreads •
Slide 14: Taking it to the next level - Comparisons
Taking it to the next level - Comparisons • What’s the difference between a bear call spread and a bear put spread? • Bearish vertical spreads can be constructed with calls or puts • Buy higher strike, sell lower strike • Bear call spreads are credit spreads and bear put spreads are debit spreads •
Slide 15: Taking it to the next level - Comparisons
Taking it to the next level - Comparisons • What’s the difference between a long call condor, a long put condor, and a short iron condor? • Long call condor is a bear call spread on top of a bull call spread • Short iron condor is a bear call spread on top of a bull put spread • Long put condor is a
Slide 16: Key Takeaways
Key Takeaways Synthetic positions can be used to change one position into another when your outlook changes or your expectations shift. Have a method of analysis for time, direction, and volatility. You can use the Profit and Loss calculator to simulate the synthetic position and evaluate the
Fidelity Investments — Conference Presentation (2016) on 6ix