The Complete Guide to Option Strategies: Advanced and Basic Strategies on Stocks, ETFs, Indexes, and Stock Indexes

PART FIVE

Advanced Topics

I love to coach basketball and have always been a big believer in the importance of fundamentals such as passing, dribbling, and playing defense, but you cannot always run the same play on offense and expect to win. It works the same way with options because you need a number of tools at your disposal to prosper under various market conditions. To have a solid foundation, you need to move past the fundamentals and learn advanced principles.

Confidence, discipline, and decisiveness are key components of developing your edge, and it is important to remember that always following the crowd can be hazardous to your wealth. It is important to trade with confidence, knowing that you hardly ever have access to all the facts. Instead, the nature of trading is that you trade with the best information that you can obtain, knowing that you cannot possibly know everything. But with options, you can trade with probabilities on your side.

If you want to treat the trading of options like a business and trade like a professional, you need to become more of an expert and rise to the next level. Part Five provides more details of option characteristics. Chapter 27 covers the important topic of volatility, Chapter 28 discusses the ramifications of exercise and assignment, Chapter 29 provides an overview of risk management strategies, Chapter 30 covers margin, Chapter 31 details placing an order, and Chapter 32 highlights key tax rules.