Book description
Get a handle on option spreads to hike profit and squash loss
The Complete Book of Option Spreads and Combinations is the definitive educational resource and reference guide for using option spreads and other common sense option strategies. This useful guide shows readers how to select the right strategy for their market outlook and risk/reward comfort level by describing the inner workings of each strategy and how they are affected by underlying market movements, implied volatility, and time decay. Even more importantly, readers will understand where each strategy performs well, and the market conditions where each should be avoided. Once the proper strategy is selected, readers will learn how to identify the best options to use based on "moneyness" and time to expiration. The companion website features tools including an option pricing tool and implied volatility calculator to help all traders implement these concepts effectively.
There are many different types of spreads, and while less risky than other option strategies in general, they are more complex, with more variables to monitor. This guide serves as a handbook for the trader wanting to exploit options to the greatest possible benefit.
Generate monthly income by selling covered strangles
Use call spreads to recover from a losing stock position
Protect an existing stock position using put diagonals
Discover the best strategies for directional market plays
Option spreads are a great tool for traders who would rather be an option seller but who need to limit their risk. The Complete Book of Option Spreads and Combinations identifies those strategies that benefit from option erosion but that limit risk.
If managed properly, spreads can provide both novice and experienced investors with the potential for a large return while limiting risk. Electronic trading platforms and reduced brokerage commissions have increased option spread trading, which should occupy a spot in every savvy investor's toolkit. Comprehensive and authoritative, The Complete Book of Option Spreads and Combinations provides a valuable manual and lasting reference.
Table of contents
- Foreword
- Preface
- Chapter 1: Not Just More or Less but Different
- Chapter 2: Just a Little Math
-
Chapter 3: Vertical Spreads
- Buying and Selling Vertical Spreads
- Vertical Spread Maximum and Minimum Values
- Naming
- Moneyness and Vertical Spreads
- Bullish and Bearish Vertical Spreads
- Selling a Call Vertical Spread
- Breakeven Points
- The Necessary Price Action
- Vertical Spreads and Your Market Outlook
- Asymmetry of Risk and Reward for Vertical Spreads
- Option Delta and Likelihood
- Vertical Spread Value Prior to Expiration
- The Other Greeks
- The Best Measure of Vertical Spread Cost
- In-the-Money Vertical Spreads
- Chapter 4: Covered Calls
- Chapter 5: Covered Puts
- Chapter 6: Calendar Spreads
- Chapter 7: Straddles
- Chapter 8: Strangles
- Chapter 9: Collars
- Chapter 10: Risk Reversal
- Chapter 11: Butterflies
- Chapter 12: Condors and Iron Condors
- Chapter 13: Conversion/Reversal
- Chapter 14: Ratio Spreads and Back Spreads
- Chapter 15: Other Spreads and Combinations
- About the Website
- About the Author
- Index
- End User License Agreement
Product information
- Title: The Complete Book of Option Spreads and Combinations: Strategies for Income Generation, Directional Moves, and Risk Reduction, + Website
- Author(s):
- Release date: October 2014
- Publisher(s): Wiley
- ISBN: 9781118805459
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