With over 300,000 copies sold, the new edition of this comprehensive mentoring guide clearly presents all of the essential information needed to learn to trade options.
Whereas most options books focus on profit and loss opportunities, this book addresses the issues of hedging market risks in an equity portfolio head on. The author presents the compelling argument that options should not be thought of as risky stand-alone trading vehicles, but offer greater value as a coordinated strategic methodology for managing equity portfolio risks as presented in numerous examples in this book.
Divided into four parts, Options reflects a guiding standard of the past nine editions and includes:
- Crystal clear explanations of the attributes and strategies of calls and puts.
- A chapter on the short life of an option. This, missing in almost every options book, is a key to understanding options trading.
- Examples in Part 1 showing different trading strategies on both sides of the trade.
The second part of the book is about closing positions; taking profit, exercising, expirations or rolling forward your position, risk analysis, profit calculations, and the impact of volatility.
The third part simplifies the complex issues of advanced strategies including the various spreads, combining spreads to successfully hedge other positions and how certain strategies work. Each spread is covered in at least one detailed example.
The final part is on evaluating risk. The unquestioned benefits of hedging risk and strategies that are virtually guaranteed to succeed that are generally the domain of the investment giants along with many examples are discussed.
The book’s broad coverage makes it an incredibly valuable desk reference to any trader in options. You won’t get explanations like these on the internet.
Michael C. Thomsett is a market expert, author, speaker, and coach. His many books include Stock Market Math, Candlestick Charting, The Mathematics of Options, and A Technical Approach to Trend Analysis.
Click here to see an interview with the author.
Table of contents
- Title Page
Part I: The Basics
Chapter 1: Calls and Puts: Defining the Field of Play
- Equity Investments
- Debt Investments
- Investments with No Tangible Value: Options
- Trading Options on Exchanges
- Calls and Puts
- Option Valuation
- Chapter 2: The Life of an Option
- Chapter 3: Opening and Tracking: How It All Works
- Chapter 4: Buying Calls: Maximizing the Rosy View
- Chapter 5: Buying Puts: The Positive Side of Pessimism
- Chapter 6: Selling Calls: Conservative and Profitable
- Chapter 7: Selling Puts: The Overlooked Strategy
- Chapter 1: Calls and Puts: Defining the Field of Play
Part II: Closing the Position
- Chapter 8: Closing Positions: Profit, Exercise, or Roll
- Chapter 9: Paper Trading: A Test Run of the Theory
Chapter 10: Calculating the Return: A Complex Aspect to Options
- Finding a Realistic Method
- Annualizing Models and Guidelines
- An Overview of Basic Calculations for Calls
- Anticipating the Likely Return
- Chapter 11: The Basics of Risk: What Every Trader Needs to Know
- Chapter 12: Strategies in Volatile Markets: Uncertainty as an Advantage
Part III: Advanced Strategies
Chapter 13: Combinations and Spreads: Creative Risk Management
- Overview of Advanced Strategies
- Vertical Spread Strategies
- Horizontal and Diagonal Spread Strategies
- Altering Spread Patterns
- Strategies with Moneyness Close to Underlying Prices
- In Conclusion
- Chapter 14: Hedges and Straddles: More Creativity
Chapter 15: Options for Specialized Trading: Leveraging the Technical Approach
- Swing Trading Basics
- The Setup Signal
- Testing the Theory
- A Strategic View of Option for Swing Trading
- Options Used for Other Trading Strategies
- Swing- and Day-Trading Advanced Strategies
- In Conclusion
- Chapter 16: Options on Futures: Leveraging Your Leverage
- Chapter 17: Synthetic Positions: Tracking the Stock
- Chapter 13: Combinations and Spreads: Creative Risk Management
Part IV: Risk Evaluation
- Chapter 18: Risk: Rules of the Game
- Chapter 19: Taxes: The Wild Card of Options Trading
Chapter 20: Choosing Stocks: Finding the Right Ingredients
- Developing a Covered Call Action Plan
- Selecting Stocks for Call Writing
- Analyzing Stocks
- Applying Analysis to Options—the “Greeks”
- Acting on Good Information
- In Conclusion
- Title: Options
- Release date: July 2018
- Publisher(s): De Gruyter
- ISBN: 9781547400119
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