commit d57a65

2025-06-13 19:26:12 Viraj Alankar: -/-

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`finance/investing.md` ..
@@ 211,9 211,19 @@
	- 4 SPLG 2026-03-20 71 Call
	- -4 SPLG 2026-03-20 71 Put

-	4 contracts would give a notional value of 71 * 400 = $28400. It might cost about $500 in cash. With portfolio margin, my buying power (coming from the value of current equities) might be reduced by $3k to hold this position. So in essence, I am allocating $3500 for this trade.
+	Since they are ATM the delta will be .50 for both. So the notional exposure is:

-	This gives me a notional exposure of $28.4k in the S&P 500 at the cost of $3500. That is 8x leverage. That would give an overall leveraged portfolio of (100-3.5+28.4)/100 = 1.25.
+	```math
+	\text{Delta Notional Exposure} = (0.50 \times 71 \times 4 \times 100) + (-0.50 \times 71 \times -4 \times 100) = (14200) + (14200) = 28400
+	```
+
+	The actual cost of the options might be $500 in cash. That means $500 is giving a notional exposure of $28400 in the S&P 500. With portfolio margin, my buying power (coming from the value of current equities) might be reduced by $3k to hold this position.
+
+	This gives an overall leverage ratio of:
+
+	```math
+	\frac{(100000 + 28400)}{(100000 - 500)} = \frac{128400}{99500} = 1.29
+	```

	#### Futures