OFRM Group Assignment
Weighting: 25% of final grade
Due date: May 30, 2025
o Submit your assignment in a Word document ONLY via MyUni by 5pm Friday, May 30. The link for the Assignment has been created for you under the Assignment page on MyUni. Email submission will not be accepted. Students are expected to submit their work by the due date to maintain a fair and equitable system.
o Groups of 3 students (Does not need to be from the same tutorial) .
o Statement of Acknowledgement of Original Work:
By submitting your assignment, you declare that all material in this assessment is your own work. You have also read the University's Academic Honesty Policy. Please be aware of policy and guidelines regarding plagiarism and use of AI (see Course Outline for website link).
o Whilst you are encouraged to make use of the LSEG access available to you for your individual research, it is mandatory to use ONLY the data provided in the “OPFM - data for assignment” file for this assignment. You may choose any of the stocks/options from the data file. Assume interest rate is 5%.
Preface
The recent imposition of tariffs by the United States on Australian exports has led to significant market volatility. Options trading volume, as one would expect, has surged in response.
This assignment challenges you to develop and justify an options trading strategy to exploit on the potential impacts of these tariffs on selected Australian companies.
Instructions:
1. Market Analysis (5 marks):
• Select an Australian company that is heavily impacted by the recent US tariffs.
• Analyse the likely effect of these tariffs on the company’s financial performance and stock prices. Consider company-specific factors and overall market sentiment.
2. Strategy Development (5 marks):
• Determine an appropriate strategy ONLY from the myriad of options trading strategies you learned in Topic 6.
• The chosen strategy must be supported by your market analysis and theoretical underpinnings.
• Justify whether your position is bullish, bearish or neutral.
3. Strategy Execution & Evaluation (10 marks):
• Initiate your options strategy position on April 2, 2025
• Monitor and record the performance of your trades over two weeks, noting any adjustments made during the period.
• Close out your position at the end of two weeks period.
• Evaluate your trading results in relation to your market analyses, option strategy, relevant benchmarks, inter alia.
4. Report Writing (5 marks):
Write a comprehensive report (2000-2500 words) in Word format ONLY that document:
• An introduction to the selected company and its impact from the US tariffs.
• A detailed explanation of your options strategy, and how that benefit from the tariff situation, including theoretical justifications.
• The outcome of your trading, with complete performance analysis.
• A thorough evaluation of the effectiveness of your strategy, including any improvements gained in hindsight.
• Conclusion.
Assessment Criteria:
• Depth and thoroughness of market analysis.
• Creativity and fitness of trading strategies.
• Accuracy and attention to detail in the trading execution.
• Clarity, coherence, and structure of the written report.