Introduction to Trading and Investing with Options (Collection)

Introduction to Trading and Investing with Options (Collection)

by Guy Cohen, W. Edward Olmstead, Michael C. Thomsett
Released January 2011
Publisher(s): Pearson
ISBN: 9780132657914

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Book description

Your complete three-book options library: up-to-date techniques, crystal-clear explanations, real examples, step-by-step instructions!

Three options best-sellers, one great price! Guy Cohen introduces options in plain English, so you can start earning profits fast. W. Edward Olmstead teaches step-by-step how to control risk, safeguard investments, and much more. Then, Michael Thomsett presents 12 conservative strategies for hedging losses, mitigating risk, creating income, and increasing overall returns.

From world-renowned leaders and experts, includingGuy Cohen, Dr. W. Edward Olmstead, and Michael C. Thomsett.

Table of contents

  1. Title Page
  2. Contents
  3. Options Made Easy: Your Guide to Profitable Trading
    1. Dedication
    2. Contents
    3. Acknowledgments
    4. About the Author
    5. Executive Summary
    6. Preface
    7. Chapter 1. Introduction to Options
      1. Criteria for Successful Investing
      2. Risk Profile Charts
      3. The Definition of an Option
      4. The Valuation of Options
      5. Intrinsic and Time Value for Calls
      6. Intrinsic and Time Value for Puts
      7. The Seven Factors that Influence an Option's Premium
      8. Risk Profile Charts for Call Options
      9. Risk Profile Charts for Put Options
      10. Memory Tips for Long and Short Calls and Puts
      11. Basic Risk Profiles Summary
      12. Chapter 1 Major Learning Points
    8. Chapter 2. Into the Marketplace
      1. How to Read Option Prices
      2. Option Contracts
      3. Option Exchanges
      4. Option Expiration Dates
      5. Exercise Prices
      6. Option Ticker Symbols
      7. Margin
      8. Placing Your Trade Order
      9. Types of Order in the Market
      10. Time Limits with Trade Orders
      11. Always Have a STOP in Mind Whenever You Make a Trade
      12. Trading Tips
      13. Leverage and Gearing
      14. A Brief Introduction to Delta (Hedge Ratio)
      15. Chapter 2 Major Learning Points
    9. Chapter 3. The Basics of Fundamental Analysis
      1. Past History and Management
      2. News and Results
      3. Sentiment and Expectations
      4. The Wider Economy
      5. Economic Indicators to Watch (USA Only)
      6. Bonds
      7. Supply and Demand
      8. Corporate Fundamentals
      9. Key Financial Terms
      10. Key Financial Figures and Ratios
      11. Search Criteria and Screening Filters for Fundamentals
      12. Common Sense and Being Alert
      13. Chapter 3 Major Learning Points
    10. Chapter 4. The Basics of Technical Analysis
      1. Three Ways to View Price Patterns
      2. Basic Chart Patterns
      3. Support and Resistance
      4. Double and Triple Tops and Bottoms
      5. Head and Shoulders
      6. Reverse Head and Shoulders
      7. Consolidations—Pennants, Triangles, and Wedges
      8. Fibonacci Retracements
      9. Elliott Wave
      10. Gann Levels
      11. Gaps
      12. Volume
      13. Technical Analysis Indicators
      14. Moving Averages
      15. Moving Average Convergence Divergence (MACD)
      16. Stochastics
      17. The Relative Strength Index (RSI)
      18. Different Time Frames
      19. More Technical Analysis Terminology
      20. Chapter 4 Major Learning Points
    11. Chapter 5. Two Popular Strategies and How to Improve Them
      1. The Synthetic Call
      2. The Covered Call (Covered Write or Buy Write)
      3. The Collar (or Protected Buy-Write)
      4. Chapter 5 Major Learning Points
    12. Chapter 6. An Introduction to the Greeks
      1. The Greeks
      2. Delta Δ
      3. Gamma Γ
      4. Theta θ
      5. Vega K (also known as Kappa or Lambda)
      6. Rho P
      7. Chapter 6 Major Learning Points
    13. Chapter 7. Bull Call Spreads and Bull Put Spreads
      1. Bull Call Spreads
      2. Bull Put Spreads
      3. Advantages of Spreads—A Summary
      4. Chapter 7 Major Learning Points
    14. Chapter 8. Two Basic Volatility Strategies
      1. Straddles
      2. Strangles
      3. Chapter 8 Major Learning Points
    15. Chapter 9. Two Basic Sideways Strategies
      1. Butterflies
      2. Condors
      3. Comparison Between the Butterfly and the Condor
      4. Chapter 9 Major Learning Points
    16. Chapter 10. Trading and Investing Psychology
      1. Myths and Realities
      2. Tips and Good Habits
      3. Your Optimal Mindset
      4. Money Management and Rule Making
      5. Chapter 10 Major Learning Points
    17. Chapter 11. Putting It All Together—A Call to Action
      1. Step 1—Choose Your Favored Strategies (Keep It Simple!)
      2. Step 2—Set Your Filters
      3. Step 3—Designing Your Trading Plan for Each Entry and Exit
      4. Chapter 11 Major Learning Points
    18. Chapter 12. Stock Futures and Options Strategies (Bonus Chapter)
      1. Futures Pricing
      2. Stock Futures and Options Strategies
    19. Appendix I. Strategy Table
    20. Appendix II. Glossary
    21. References and Recommended Reading
    22. Index
    23. Financial Times Prentice Hall Books
  4. Options for the Beginner and Beyond: Unlock the Opportunities and Minimize the Risks
    1. Contents
    2. Acknowledgments
    3. About the Author
    4. Preface
    5. Section I Basic Concepts
      1. 1 Introduction
        1. Why Options?
        2. The Basic Concept of Options
        3. Major Differences Between Stocks and Options
        4. A Detailed Explanation of Options
        5. Comments
      2. 2 Option Selection
        1. What Is a Cheap Option?
        2. Selecting a Call
        3. Overall Evaluation
        4. Selecting a Put
      3. 3 Entering and Exiting Option Trades
        1. Entering a Trade
        2. Exiting a Trade
      4. 4 The Greeks
        1. Delta
        2. Theta
        3. Gamma
        4. Vega
        5. Rho
      5. 5 Risk Graphs
        1. Single Option Trade
        2. Multiple Option Trade
        3. Comments
      6. 6 Leaps
        1. Comments
      7. 7 Assignment Anxiety
        1. Comments
        2. Applications
      8. 8 Broker Selection
        1. Types of Brokers
        2. Commissions
        3. Trading Platform
        4. Margin and Trading Limitations
        5. Live Broker Assistance
        6. Comments
      9. 9 Miscellaneous Tips
        1. Time Is Money
        2. Trading with the Trend
        3. Risk Capital for Options Trading
        4. Tracking Trades
        5. Anticipating Events
        6. Real-Time Quotes
        7. Market Orders with Options
        8. Options Calculator
    6. Section II TRADING STRATEGIES
      1. 10 Vertical Spreads
        1. Debit Vertical Spreads
        2. Credit Vertical Spreads
      2. 11 Event-Producing Credit Spreads
        1. Comments
      3. 12 Calendar Spreads
        1. The Rollout Maneuver
        2. Comments
      4. 13 Advanced Calendar Spreads
        1. Volatility Skew Trades
        2. Ratio Calendar Spread Trades
        3. Deep-in-the-Money LEAPS Put Calendar Spreads
        4. Diagonal Calendar Spread Trades
      5. 14 Covered Calls
        1. An Idealized Trade
        2. A Realistic Trade
        3. Covered Call vs. Naked Put
        4. Comments
      6. 15 Straddles and Strangles
        1. The Straddle Trade
        2. The Strangle Trade
      7. 16 Stock Repair and Stock Enhancement
        1. Stock Repair Strategy
        2. Stock Enhancement Strategy
      8. 17 Married Puts
        1. Comments
      9. 18 Collars
        1. Comments
      10. 19 Advanced Collars
        1. Comments
      11. 20 Naked Option Writing
        1. The Risk of Naked Option Writing
        2. Acquiring Stock with Naked Puts
      12. 21 Stock Substitutes
        1. Synthetic Long Stock
        2. Deep-in-the-Money Put
        3. Deep-in-the-Money Call
      13. 22 Backspreads
        1. Comments
      14. 23 Butterfly Spreads
        1. Standard Butterfly Trade
        2. Butterfly Trade with Adjustments
        3. Unbalanced Butterfly Trade
      15. 24 Iron Condors and Double Diagonals
        1. The Iron Condor Trade
        2. The Double Diagonal Trade
        3. Comments
      16. 25 An End-of-Year Tax Strategy
        1. Tax Code Restrictions
        2. Qualified Covered Calls
        3. Comments
    7. Section III SPECIAL TOPICS
      1. 26 Day Trading an Index with Options
        1. Comments
      2. 27 Delta-Neutral Trading
      3. 28 Theory of Maximum Pain
      4. 29 Implied Volatility and the Black-Scholes Formula
        1. Historical Background
        2. Implied Volatility
        3. Applications of Implied Volatility
        4. Comments
      5. 30 The Put-Call Parity Relationship
        1. Calls Cost More Than Puts
        2. Applications of Put-Call Parity
    8. Index
  5. Options Trading for the Conservative Investor: Increasing Profits without Increasing Your Risk
    1. Contents
    2. Acknowledgments
    3. About the Author
    4. Preface
      1. The Elusive Goal: Low Risk and High Yield
    5. 1. Setting the Ground Rules
      1. The Ground Rules
      2. A Model Portfolio
    6. 2. Option Basics
      1. The Workings of Option Contracts
      2. Long and Short
      3. Calls and Call Strategies
      4. Puts and Put Strategies
      5. Listed Options and LEAPS Options
      6. Coordinating Strategies with Portfolio Goals
      7. Option and Stock Volatility: The Central Element of Risk
      8. Valuable Resource
      9. Trading Costs in the Option Analysis
      10. Tax Rules for Options: An Overview
      11. The Importance of Professional Advice and Tax Planning
    7. 3. Options in Context
      1. The Nature of Risk and Reward
      2. Perceptions about Options
      3. Short Positions: Naked or Covered
      4. Margin Requirements and Trading Restrictions
      5. Return Calculations: Seeking Valid Comparisons
      6. Long-Term Goals as a Guiding Force
      7. Exercise as a Desirable Outcome
    8. 4. Managing Profits and Losses
      1. Your Conservative Dilemma
      2. Managing Profits with Options
      3. Overcoming the Profit-Taking Problem
      4. Managing the Inertia Problem
      5. Taxes and Profits
    9. 5. Options as Cash Generators
      1. The Covered Call Concept
      2. Examples: Ten Stocks and Covered Calls
      3. Smart Conservative Ground Rules
      4. A Conservative Approach
      5. Tax Ramifications of Covered Calls
      6. Rolling Forward and Up: Exercise Avoidance
      7. The Exercise Acceptance Strategy
    10. 6. Alternatives to Stock Purchase
      1. Leverage and Options
      2. The Long-Call Contingent-Purchase Strategy
      3. The Covered Long Call
      4. Short Puts and Contingent Purchase
      5. Rescue Strategy Using Calls
      6. Rescue Strategy Using Puts
      7. Covered Calls for Contingent Sale
    11. 7. Option Strategies in Down Markets
      1. Thinking Outside the Market Box
      2. The Long Put: The Overlooked Option
      3. Short Puts: A Variety of Strategies
      4. Comparing Rates of Return for Dissimilar Strike Prices
      5. Using Calls in Down Markets
      6. Evaluating Your Stock Positions
      7. Stock Positions and Risk Evaluation
      8. Options and Downside Risk
      9. Option Planning with Loss Carryover
    12. 8. Combination Conservative Techniques
      1. Spread Techniques
      2. Straddle Techniques
      3. Long or Short Positions
      4. Theory Versus Practice
      5. Tax Problems with Combination Strategies
      6. The Ultimate High-Return Strategy
      7. Examples of the Strategy in Practice
      8. Outcome Scenarios
      9. The Augmented Strategy: A Short Straddle
      10. Rescue Strategies
    13. 9. Stock Selection and the Option Contract
      1. Remembering Your Conservative Profile as a Priority
      2. Dangers and Pitfalls in Using Options
      3. Temptation to Select Most Volatile Stocks
      4. Creating Sensible Conservative Standards
      5. Maintaining Fundamental Clarity
      6. The Importance of Taxes in the Option Equation
      7. Option Volatility to Judge Stocks
    14. Appendix: Option Trading Strategies
    15. Glossary
  6. Put Option Strategies for Smarter Trading: How to Protect and Build Capital in Turbulent Markets
    1. Contents
    2. Acknowledgments
    3. About the Author
    4. Introduction: Surviving in Volatile and Falling Markets
    5. 1. The Flexible Nature of Options: Risks for All Levels
      1. Key Point
      2. Terms of Options
      3. Key Point
      4. Key Point
      5. Key Point
      6. Key Point
      7. Valuation of Options
      8. Key Point
      9. Key Point
      10. Key Point
      11. Key Point
      12. Dividends and Puts
      13. Key Point
      14. Key Point
      15. Key Point
      16. Key Point
    6. 2. Puts, the Other Options: The Overlooked Risk Hedge
      1. Puts as Insurance for Paper Profits
      2. Key Point
      3. Key Point
      4. Key Point
      5. Key Point
      6. Key Point
      7. Key Point
      8. Key Point
      9. Risk Considerations: Types of Risks
      10. Key Point
      11. Key Point
      12. Key Point
      13. Key Point
      14. Key Point
      15. Key Point
    7. 3. Profit-Taking Without Selling Stock: An Elegant Solution
      1. The Insurance Put
      2. Key Point
      3. Key Point
      4. Valuable Resource
      5. Picking the Best Long Put: Time, Proximity, and Cost
      6. Key Point
      7. Key Point
      8. Buying Puts Versus Short-selling Stock
      9. Key Point
      10. Key Point
      11. Rolling into Spreads to Offset Put Losses
      12. Key Point
      13. Key Point
      14. Buying Puts to Protect Covered Call Positions
      15. Key Point
      16. Key Point
      17. Key Point
      18. Tax Problems with Long Puts
      19. Key Point
      20. Key Point
    8. 4. Swing Trading with Puts: Long and Short or Combined with Calls
      1. Key Point
      2. Basics of Swing Trading
      3. Key Point
      4. Key Point
      5. A Swing Trading Method: Long and Short Stock
      6. Key Point
      7. The Alternative: Using Options
      8. Key Point
      9. Key Point
      10. Key Point
      11. Key Point
      12. Variations on the Options Swing Trading Method
      13. Key Point
      14. Key Point
      15. Key Point
      16. Multiple Contract Strategies
      17. Key Point
      18. Key Point
      19. Key Point
      20. Key Point
      21. Key Point
    9. 5. Put Strategies for Spreads: Hedging for Profit
      1. Bear Spreads
      2. Key Point
      3. Key Point
      4. Bull Spreads
      5. Key Point
      6. Calendar Spreads
      7. Key Point
      8. Key Point
      9. Diagonal Spread Strategies
      10. Key Point
      11. Key Point
      12. Key Point
      13. Combination Put Spreads
      14. Key Point
      15. Key Point
      16. Key Point
      17. Key Point
      18. Key Point
      19. Key Point
    10. 6. Put Strategies for Straddles: Profits in Either Direction
      1. The Long Straddle
      2. Key Point
      3. Key Point
      4. The Short Straddle
      5. Key Point
      6. Key Point
      7. Key Point
      8. Strangle Strategies
      9. Key Point
      10. Key Point
      11. Key Point
      12. Calendar Straddles
      13. Key Point
    11. 7. Puts in the Ratio Spread: Altering the Balance
      1. Ratio Put Spreads
      2. Key Point
      3. Ratio Put Calendar Spreads
      4. Key Point
      5. The Backspread (Reverse Ratio)
      6. Key Point
      7. Key Point
      8. Ratio Calendar Combinations
      9. Key Point
      10. The Diagonal Backspread
      11. Key Point
      12. Short Ratio Puts
      13. Key Point
    12. 8. Puts as Part of Synthetic Strategies: Playing Stocks Without the Risk
      1. Synthetic Stock Strategies
      2. Key Point
      3. Key Point
      4. Key Point
      5. Synthetic Strike Splits
      6. Key Point
      7. The Synthetic Put
      8. Key Point
    13. 9. Puts in Contrary Price Run-ups: Safe Counter-Plays During Bear Markets
      1. Option Valuation and Volatility
      2. Key Point
      3. Key Point
      4. Key Point
      5. Volatility Trading
      6. Key Point
      7. Factors Affecting Option Value
      8. Key Point
      9. Key Point
      10. Key Point
      11. Key Point
      12. Spotting the Overall Trend
      13. Key Point
      14. Reliance on Stock-based Technical Analysis
      15. Key Point
      16. Key Point
      17. Key Point
      18. Key Point
    14. 10. Uncovered Puts to Create Cash Flow: Rising Markets and Reversal Patterns
      1. The Uncovered Short Put
      2. Key Point
      3. Key Point
      4. Key Point
      5. Evaluating Your Rate of Return from Selling Puts
      6. Key Point
      7. Key Point
      8. Covered Short Straddles
      9. Key Point
      10. Key Point
      11. Key Point
      12. Covered Short Spreads
      13. Key Point
      14. Key Point
      15. Key Point
      16. Recovery Strategies for Exercised Covered Straddles and Spreads
      17. Key Point
      18. Key Point
      19. Short Puts in Rising Markets: One-Sided Swing Trading
      20. Key Point
      21. Key Point
    15. Glossary
    16. Index
    17. Financial Times Press

Product information

  • Title: Introduction to Trading and Investing with Options (Collection)
  • Author(s): Guy Cohen, W. Edward Olmstead, Michael C. Thomsett
  • Release date: January 2011
  • Publisher(s): Pearson
  • ISBN: 9780132657914