TRADING STRATEGIES USING OPTIONS OVERVIEW & PURPOSE OF THIS PROJECT Trading with options is so much more profitable than just trading stocks, and it's a lot easier than most people think. This project lets you work on option trading using real financial data. Idea underlying this project is for you to replicate the spreads and combinations learned in class and speculate. At the end, we would want to create as much profit as possible (but it's okay if we were not able to).LEARNING OBJECTIVE:critical thinking (data analysis, synthesize data, suggest a solution) HOW TO GET STARTED Find the right stock. You want to find a company that you are interested in and have a good insight on. Try to stick with industries you understand: if you enjoy shopping, look at retailers. If you love gaming, look at game software company, etc. This will make your research a lot easier and lead to a better stock pitch. Qualitatively, try to choose the best/worst company in that industry Quantitatively, use arbitrary parameters to filter out stocks. For example, you can select certain criteria (i.e. market cap, P/E, ROE, industry, etc.) and it spits out list of companies that meet the criteria. Free online stock screeners include Yahoo Finance, Google Finance, and Capital IQ.(e.g. Yahoo Finance screener: https://finance.yahoo.com/screener/new/ ) SOURCES OF INFORMATION General financial sites Yahoo Finance, Google Finance, MSN Money, Bloomberg terminals, WSJ.com Deeper financial sites Morningstar, Value Line , Reuters Research on DemandWHAT TO DO : Replicate at least four of the following spreads/combinations: bull spread, bear spread, butterfly spread, straddle, strip and strap by using call and/or put optionsWHAT SHOULD BE INCLUDED IN YOUR PAPER: Screen capture the information as in the example below In a table, write down information of the options you have used (similar to the one given in the example below) Create a profit/payoff table and graph for your spreads and combinations, respectively When expiration date reaches, find out whether your spreads and combinations created a profit or loss. How much was your total profit/loss? Suggest how you would have been made a (larger) profit with the respective spread/combinations : e.g. used different strike prices? Different option types? Different positions