Name ____________________________ SSN __________(last 4 ...



Name ____________________________ PSU ID________(last 4)

DUE WEDNESDAY 4/20/16 AT THE BEGINNING OF CLASS

Template for Stock Trak Assignment – PLEASE USE this template and PLEASE STAPLE all pages together. Please make sure you provide us with a print out of all your trades with name and account number on top of page (see below). Thanks in advance!

Points – 100 points total – In each of your 8 explanations, please refer to the date and ticker symbols by labeling the trade you referred to as #1 through #8 on the print out of all your trades so the grader can easily follow along, thanks! Hit enter to make the room you need. Make sure you clearly explain how you would make money if prices went in a happy direction - that is, convey that you know exactly what your bet is and give your reasoning underlying your bet (for example, I went short on Treasuries because ...........).

#1. Going Long (stocks) and explanation = 10 points

Ticker = 2 pts

I went long on XYZ because I thought prices would rise = 4 pts

Continuing – if prices rise I could sell XYZ for a higher price than I bought it for and keep the difference as profits …buy Low and sell High ….4 points

#2. Going Short (stocks) and explanation = 10 points

Ticker = 2 pts

I shorted XYZ because I was hoping the price of XYZ would fall – 4 points

When you short stocks you borrow them and sell them immediately – your debt is in XYZ stocks – if the price falls you can buy them back at a lower price, square up your bet and keep the proceeds as profits – sell high and buy low

#3. Buy Calls (stock options) and explanation = 10 points

Ticker = 2 pts

I bought call options on XYZ hoping the price on XYZ would rise – 4 points

If prices rise above the strike price I could exercise option…buy low at strike and sell high at spot

OR

If prices rise, the value (premium) of my call options will rise and thus, I could sell them for a higher price than I bought them for

#4. Buy Puts (stock options) and explanation = 10 points

Ticker = 2 pts

I bought put options on XYZ hoping the price on XYZ would fall – 4 points

If the spot price fall below the strike price I could exercise option…buy low at spot and sell high at strike

OR

If prices fall the value (premium) of my put options will rise and thus, I could sell them for a higher price than I bought them for

#5. Long on Treasury futures and explanation = 10 points

Ticker = 2 pts

I went long on US GS because I was hoping bond prices would rise/interest rates would fall – 4 points

If prices rise I could sell the futures contracts for a higher price than I bought them for – buy low sell high

#6. Short on Treasury futures and explanation = 10 points

Ticker = 2 pts

I went short on US GS because I was hoping bond prices would fall/interest rates would rise – 4 points

If prices fall I could buy the futures contracts back at a lower price than I sold them for and keep the difference as profits – sell high….buy low

#7. Bet on a currency and explanation = 10 points

Ticker = 2 pts

Be easier on this one –

#8. Purchasing futures options and explanation = 10 points

Ticker = 2 pts

Make sure they mention whether it is a call (long) or put short – otherwise, be easier on this one

The last part (last pages) of your assignment must provide A PRINT OUT OF ALL the trades that you made during the semester and for full credit, must satisfy the following two criteria:

9. 20 or more trades = 10 points

10. Trades in Jan, Feb, March, and April = 10 points

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