Instructions on Assignment:
Assignment
The assignment is an individual written piece of work (as opposed to a piece of written group work) and you are required to answer all three elements of the question.
1. The investment management department of your company has asked you to construct a speculative trading strategy using options for a £50,000 investment in a single FTSE 100 or FTSE 250 non-bank, non-insurance company’s shares for the 38 working day period between the 23rd February 2015 and 17th April 2015 (inclusive). The department has stipulated that your choice of strategies as one of either a:
1. Butterfly, or 2. Condor, or
3. Strangle, or 4. Strip, or
5. Strap, or
a) Supported with real market data as well as suitable academic literature, for the shares you wish to create an options trading strategy for, set up an options-based trading strategy (from the choices 1 to 5 above) given your view of:
» the company,
» current market sentiment regarding the segment in which it operates
» and likely market movements over the period.
You must include ‘screen shot’ evidence the source of your options pricing in a suitably referenced appendix.
Describe the reasons why your chosen strategy is appropriate for the company you have identified and researched and present the expected profit/loss of your trading strategy using both a table and a graph.
(1,000 Words : 35 Marks)
b) What is the annualised return that you are targeting based on your approach? Assess the risk that your strategy will not produce the returns you have anticipated as well as the risks that the use of such derivative has introduced to the company for whom you have created the strategy?
( 500 Words : 10 Marks)
c) Report on the actual profit and loss of your strategy over the period and analyse and describe why your strategy achieved the results observed.
( 500 Words : 15 Marks)
The assignment should be word processed within the limit of 2,000 words (excluding appendices, tables, charts and graphs). The word count must be stated in the assignment. References to relevant academic theory and research findings should be provided and referenced appropriately.
Important note about ARNA regulations
The regulations specify that students must complete every assessment component contributing to the modules on their programme. This applies to all forms of assessment as defined in the module descriptor. Please note that:
• if any assessment component is not completed, students will be failed in the module even if the module pass mark has been achieved;
• if the requirements for referral specified in section 3 of ARNA1 are met, a resit opportunity will be given;
• if unable to complete an assessment component because of extenuating circumstances, students should follow the procedure described in the Student Guide to Extenuating Circumstances1.
This change has applied since September 2013 and was approved by Academic Board in consultation with the Students’ Union. Students should consult their Programme Leader or Guidance Tutor if they have any queries. Independent advice and support is also available from the Students’ Union Advice & Representation Centre (su.advice@northumbria.ac.uk) or from a student adviser in Student Services.
1ARNA and the Student Guide to Extenuating Circumstances Affecting Assessed Work are available from http://www.northumbria.ac.uk/sd/central/ar/lts/assess/assproc/assdocstud/
Word limits and penalties for assignments
If the assignment is within +10% of the stated word limit no penalty will apply.
The word count is to be declared on the front page of your assignment and the assignment cover sheet. The word count does not include:
• Title and Contents page • Reference list • Appendices • Appropriate tables, figures and illustrations
• Glossary • Bibliography • Quotes from interviews and focus groups.
Please note, in text citations [e.g. (Smith, 2011)] and direct secondary quotations [e.g. “dib-dab nonsense analysis” (Smith, 2011 p.123)] are INCLUDED in the word count.
If this word count is falsified, students are reminded that under ARNA page 30 Section 3.4 this will be regarded as academic misconduct.
If the word limit of the full assignment exceeds the +10% limit, 10% of the mark provisionally awarded to the assignment will be deducted. For example: if the assignment is worth 70 marks but is above the word limit by more than 10%, a penalty of 7 marks will be imposed, giving a final mark of 63.
Students are advised that they may be asked to submit an electronic version of their assignment.
Time limits and penalties for presentations
The time allocated for the presentation must be adhered to. At the end of this time, the presentation will be stopped and will be marked based on what has been delivered within the time limit.
Submission of Assessment:
All assignments must be submitted via the Undergraduate Programme Office. Each assignment must be accompanied by an Assessed Work Form which must be completed in full. The assignment will not be accepted by the Undergraduate Programme Office unless the form is completed correctly.
Marked assignments will be returned to students. It is advisable to retain a copy of your assignment for you own records. Your mark will be returned on the Assessed Work Form via the Undergraduate Programme Office.
Referencing your work
The APA method of referencing uses the author’s name and the date of the publication. In-text citations give brief details of the work you are referring to in your text. References are listed at the end of the text in alphabetical order by the author’s name. The general format of an electronic journal reference in the APA style is shown below:
Coutu, D. (2009). Why Teams Don’t Work. Harvard Business Review, 87(5), 98-105. Retrieved 29th April 2012 from EBSCO http://searchebscohost.com
Author/s name and initials are listed first, followed by year of publication in brackets. Then there is the title of article and the journal where the article appears, which is in italics. Then state the volume and issue number (in brackets) along with the pages where article can be located. Finally add the date the article was retrieved and then the name of the database, followed by the web address. Wherever possible use the homepage URL rather than the full and extended web address.
For further information on why it is important to reference accurately go to the Referencing and Plagiarism topic in Skills Plus available from the Library website:
www.northumbria.ac.uk/skillsplus
You will find other useful help guides on Skills Plus to help you with the skills involved in writing your assessments and preparing for exams.
For further information on the APA style of referencing see the Concise Rules of the APA Style and the APA website http://www.apastyle.org/
