Options Trading for the Institutional Investor: Managing Risk in Financial Institutions

Table of contents

1. About This eBook
2. Title Page
3. Copyright Page
4. Contents
5. Acknowledgments
6. About the Author
7. Preface
   1. The Elusive Goal: Low Risk and High Yield
   2. Endnotes
8. 1. Setting the Ground Rules
   1. The Ground Rules
   2. A Model Portfolio
9. 2. Option Basics
   1. The Workings of the Options Contract
   2. Calls and Call Strategies
   3. Puts and Put Strategies
   4. Listed Options and LEAPS Options
   5. Coordinating Strategies with Portfolio Goals
   6. Option and Stock Volatility: The Central Element of Risk
   7. Trading Costs in the Option Analysis
   8. Tax Rules for Options: An Overview
   9. The Importance of Professional Advice and Tax Planning
   10. Endnotes
10. 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
11. 4. Chart-Based Analysis
    1. Criteria for Chart-Based Analysis
    2. A Study of Charts for the Model Portfolio
    3. Endnote
12. 5. 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
13. 6. Options as Cash Generators
    1. The Covered Call Concept
    2. Examples: Ten Stocks and Covered Calls
    3. Working within Preestablished Standards
    4. Smart Conservative Ground Rules
    5. A Conservative Approach
    6. Tax Ramifications of Covered Calls
    7. Rolling Forward and Up: Exercise Avoidance
    8. The Exercise Acceptance Strategy
    9. Endnote
14. 7. The 1-2-3 Iron Butterfly
    1. The Iron Butterfly
    2. The 1-2-3 Iron Butterfly Concept
    3. The Hedge Matrix and Collateral Requirements
    4. Examples of the Strategy
15. 8. The Dividend Collar
    1. Managing Portfolio Profits with the Dividend Collar
16. 9. 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
17. 10. 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. Using Calls in Down Markets
    5. Evaluating Your Stock Positions
    6. Stock Positions and Risk Evaluation
    7. Options and Downside Risk
    8. Option Planning with Loss Carryover
    9. Endnote
18. 11. 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
19. 12. Risk Evaluation Techniques
    1. The Nature of Greed Risk
    2. A Range of Options-Related Risks
    3. Estimating Your Risk Tolerance
20. 13. 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
21. Glossary
22. Appendix. Option Trading Strategies
23. Index