10

Options*

We wanted to include a chapter on Options because they are yet another weapon that can be included in one's trading arsenal. Options are confusing to most traders and, therefore, are overlooked. Len Yates, with his expertise, clears up the confusion and introduces several option strategies. The ideas that are presented can be used with most option analysis software.

Being from the Chicago area, host to some of the world's largest options exchanges, I know or encounter many people whose work is related to options trading. So I have the advantage of being surrounded by plenty of locals who are familiar with options and how they work. Still, there are likely even more people unfamiliar with options.

During the course of many social engagements, I invariably end up leading a discussion on options and what options are. Without even finishing my standard overview, I am invariably met with a response such as, “Well, that sounds too complicated for me” from a befuddled listener. This usually leads me to the snack table because I don’t want to make any party listen to what might be to them an arcane subject.

But what I want to say, and sometimes do, is that options are not really that complicated if you’re committed to learning the terminology and the basic principles of the game. I like comparing options to chess: if you spend an hour learning the rules, you may find you like the game and can win at it, too.

Of course, practice is key to becoming successful. Options have a ...

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