ABSTRACT
The writers have felt it should be possible to express this relation between the amount of capital tied up and the state of the Major Trend in a neat and definite equation. Most important is the question of how much total "risk" people are assuming because some stocks are very conservative and others are very speculative, it is not enough to determine what part of people capital should be applied in a market trend. In 1973, a new method of handling option contracts was inaugurated by the Chicago Board Options Exchange and later the American Stock Exchange. Stock options were traded only on the basis of individual agreement between a buyer or a writer, and an opposite number, directly or through a broker or dealer. Modern commodity futures contracts resemble stock options in their dual nature of serving either as trading media or as insurance devices.
