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Options for the Beginner and Beyond: Unlock the Opportunities and Minimize the Risks

Options for the Beginner and Beyond: Unlock the Opportunities and Minimize the Risks

by W. Edward Olmstead - Professor of Applied Mathematics McCormick School of Engineering and Applied Sciences Northwestern University
Publisher: PH Professional Business
Release Date: March 2006
ISBN: 0131721283
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Book Description

Brief, carefully paced lessons on options and trading strategies using verbal definitions and many trading examples for clarification. Each lesson builds on the one preceding it and explains options in plain English, from start to finish. Step-by-step coverage of controlling risk, protecting your investments -- even advanced strategies other introductory books ignore! Authored by Dr. W. Edward Olmstead, contributing editor to The Spear Report and editor of The Options Professor newsletter.

Table of Contents

  1. Copyright
  2. Financial Times Prentice Hall
  3. Financial Times Prentice Hall Books
  4. Acknowledgments
  5. About the Author
  6. Preface
  7. Basic Concepts
    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. Option Selection
      1. What Is a Cheap Option?
      2. Selecting a Call
      3. Overall Evaluation
      4. Selecting a Put
    3. Entering and Exiting Option Trades
      1. Entering a Trade
      2. Exiting a Trade
    4. The Greeks
      1. Delta
      2. Theta
      3. Gamma
      4. Vega
      5. Rho
    5. Risk Graphs
      1. Single Option Trade
      2. Multiple Option Trade
      3. Comments
    6. Leaps
      1. Comments
    7. Assignment Anxiety
      1. Comments
      2. Applications
    8. Broker Selection
      1. Types of Brokers
      2. Commissions
      3. Trading Platform
      4. Margin and Trading Limitations
      5. Live Broker Assistance
      6. Comments
    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
  8. Trading Strategies
    1. Vertical Spreads
      1. Debit Vertical Spreads
      2. Credit Vertical Spreads
    2. Event-Producing Credit Spreads
      1. Comments
    3. Calendar Spreads
      1. The Rollout Maneuver
      2. Comments
    4. 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. Covered Calls
      1. An Idealized Trade
      2. A Realistic Trade
      3. Covered Call vs. Naked Put
      4. Comments
    6. Straddles and Strangles
      1. The Straddle Trade
      2. The Strangle Trade
    7. Stock Repair and Stock Enhancement
      1. Stock Repair Strategy
      2. Stock Enhancement Strategy
    8. Married Puts
      1. Comments
    9. Collars
      1. Comments
    10. Advanced Collars
      1. Comments
    11. Naked Option Writing
      1. The Risk of Naked Option Writing
      2. Acquiring Stock with Naked Puts
    12. Stock Substitutes
      1. Synthetic Long Stock
      2. Deep-in-the-Money Put
      3. Deep-in-the-Money Call
    13. Backspreads
      1. Comments
    14. Butterfly Spreads
      1. Standard Butterfly Trade
      2. Butterfly Trade with Adjustments
      3. Unbalanced Butterfly Trade
    15. Iron Condors and Double Diagonals
      1. The Iron Condor Trade
      2. The Double Diagonal Trade
      3. Comments
    16. An End-of-Year Tax Strategy
      1. Tax Code Restrictions
      2. Qualified Covered Calls
      3. Comments
  9. Special Topics
    1. Day Trading an Index with Options
      1. Comments
    2. Delta-Neutral Trading
    3. Theory of Maximum Pain
    4. Implied Volatility and the Black-Scholes Formula
      1. Historical Background
      2. Implied Volatility
      3. Applications of Implied Volatility
      4. Comments
    5. The Put-Call Parity Relationship
      1. Calls Cost More Than Puts
      2. Applications of Put-Call Parity
  10. Index