Sign In
Not register? Register Now!
Essay Available:
Pages:
3 pages/≈825 words
Sources:
No Sources
Style:
MLA
Subject:
Accounting, Finance, SPSS
Type:
Term Paper
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 16.85
Topic:

E-Mini S&P 500 VIX and E-Mini S&P 500 Trade Analysis

Term Paper Instructions:

This time please finish the Part2 base on the part1 you did
This course requires that you complete a project. The project is introduced in this module. You will be required to submit your project in two parts:
- Part 1 is submitted as part of this module.
- Part 2 is submitted as part of module 12.
Project overview
Futures and exchange-traded options are widely available for the following asset classes:
Equities
Agriculture
For each of these asset classes, please develop a well-reasoned hypothesis regarding the relative performance of two assets within the asset class. A relative performance trade (otherwise known as a pairs trade) does not require you to identify whether a given security will increase or decrease or value. Instead, it requires the following:
1. Identify two assets within the asset class.
2. Identify which of the two assets you believe will outperform the other asset.
3. Long the asset that you believe will outperform and short the asset that you believe will underperform.
You can learn more about relative performance/pairs trades here: http://www(dot)investopedia(dot)com/articles/trading/04/090804.asp.
Relative performance trade example
Here is an example of a relative performance trade.
Imagine you are forming a relative performance hypothesis related to the following two stocks in the apparel stores industry:
Gap, Inc.
TJX Companies
You do not know whether the overall stock market will increase in value or decrease in value in the future. But you do believe that whether markets increase or decrease in value, GAP, Inc. will outperform TJX Companies. Therefore, you should long Gap, Inc. and short TJX Companies. If you do so:
- If markets increase in value, your long position in Gap, Inc. will increase in value more than your short position in TJX Companies will decrease in value.
- If markets decrease in value, your long position in Gap, Inc. will lose less money than your short position in TJX Companies will earn in value.
Project details
For each hypothesis, please develop an exchange-traded derivatives trade that can monetize the view. Hence, derivatives that do not trade on exchanges, such as forwards, credit default swaps, or interest rate swaps, should not be used. Only use derivatives – do not use any cash products such as stocks or bonds.
Please assume that you have up to 1,000,000 to allocate to each asset class (for the purpose of premiums and/or margin).
Please assume that you will acquire the position sometime during this week and will hold it until sometime during the week of Module 12. Please do not develop dynamic strategies that require buying or selling between this week and the week of Module 12. So there will only be two relevant dates:
The date you enter the position, sometime this week.
The date you close out the position, sometime during the week of Module 12.
Some data sources from which you can identify information include:
www(dot)CBOE(dot)com
www(dot)CMEGroup(dot)com
www(dot)onechicago(dot)com
http://finance(dot)yahoo(dot)com/futures
http://finance(dot)yahoo(dot)com/options
Project deliverables
This project has two deliverables, as follows:
Deliverable 1: Please submit this week a report that describes your hypotheses and trades in detail (a link is provided below the project description through which you should submit Deliverable 1). Make sure that your plan is as realistic as possible, and incorporates all premiums and margin/collateral requirements. Your report should be 5 pages in length and should include the following sections:
- A single-page summary of your trades (1 page in total).
- A discussion of your hypotheses (1 separate page per trade).
- A discussion of the trade that you implemented, including detailed numbers with supporting evidence from your data source (1 separate page per trade).
Deliverable 2: Please submit during Module 12 a detailed report that describes the performance of your trades. Exactly how much did you earn on each trade? Please make sure to describe your performance in specific dollar terms, not percentage terms. Your report should be three pages in length and include the following sections:
- A single-page summary of the performance of your trades (1 page in total).
- A discussion of the performance of your trades including a discussion explaining any failures, and including detailed numbers with supporting evidence from your data source (only 1 page per trade).

Term Paper Sample Content Preview:
Student’s Name
Professor’s Name
Course
Date
Trading Futures
E-Mini S&P 500 VIX and E-Mini S&P 500 summary
The S&P 500 VIX outperformed the S&P 500 future, registering a profit of $ 39,500 against $11,600. The performance was expected because the S&P 500 Future is highly volatile compared to S&P 500. Besides, the different contract sizes made the difference in terms of the profits realized. The declining price of the S&P 500 VIX indicates that calmness is slowly being restored in the market as China's economic recovery stimulates growth in the global markets. Inflation rates and war in Ukraine remain the remain to be a concern despite signs of recovery.
The S&P 500 Index is a broad-based index of 500 stocks that are publicly traded in the U.S. stock market. The strict COVID measures in China also play a huge role in the performance of the S&P 500. The constant lockdowns have disrupted the global supply and logistic chain leading to delays of goods and commodities to manufacturers. Stock markets have been under pressure in recent months due to a combination of factors, including worries about the Chinese economy, the impact of rising interest rates, and the persistently high inflation rate (Rolnick and Megaw). Thus, the economic conditions, make it harder for investors to predict where the market is headed.
The S&P 500 VIX Futures makes for a great trading vehicle if you are a short term trader. The first step is to wait for an upward or downward movement of the 200 period Bollinger Bands to identify and confirm a breakout. A downward break down of the range will signal a bearish move while an upward breakout will be a bullish sign. Once a breakout occurs, determine the high or low value of the breakout candle. Entry is taken at a point which is a minimum of 1 tick (1/100th of 1%) below the high of the breakout candle for a bearish move or 1 tick above the low of the breakout candle for a bullish move. Exit is taken at the end of the session.
E-Mini S&P 500 VIX trade analysis
There is a massive amount of uncertainty regarding COVID-19 and the direction of the economy. The market is clearly worried about the potential for another wave of infections and the possibility that the economy will not rebound as quickly as hoped. These unknowns have caused the S&P 500 VIX futures prices to skyrocket, reflecting the market's reaction to the uncertainty. The relaxation of COVID regulations in China, on the other hand,...
Updated on
Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now:
Order

👀 Other Visitors are Viewing These MLA Term Paper Samples:

HIRE A WRITER FROM $11.95 / PAGE
ORDER WITH 15% DISCOUNT!
Order Now