HOW TO USE YOUR HUMAN ADVANTAGE TO OUTPERFORM ALGORITHMS IN THE OPTIONS MARKET
If you're a value investor who wants to get your money into the lucrative options market, forget about day trading, chart patterns, and market timing. This systematic book lays out a path to long-term wealth by taking positions on companies with real intrinsic value--the kind Ben Graham and Warren Buffett would invest in.
Leave the complex algorithms and "Greeks" for the floor traders. Erik Kobayashi-Solomon, former investment banker, hedge fund risk manager, and valuation consultant to the World Bank, gives you the knowledge and sophistication to understand what options pricing reveals about the market's estimation of future stock prices. He then demonstrates how to find tremendous opportunity for low-risk, high-profit investments in the difference between the market's mechanized price ranges and ones made by you, a thoughtful human being armed with the insight this book offers.
Everything you need to make options a powerful contributor to your portfolio is inside, including:
- A thorough explanation of what options are and what their prices can tell you about the market's expectations for the future price of a stock
- A proven way to envision the risk/reward trade-off for stocks and options and a straightforward method to use the flexibility and directionality of options to tilt the risk/return balance in your favor
- A robust and intuitive framework for assessing the value of a company
- Strategies to avoid the most common behavioral pitfalls
- Tips for using the information on an option-pricing screen
- Thorough coverage of important option investment strategies, including "covered calls," "protective puts," and "collars"
Regardless of your experience level with options, this versatile guide makes you a better investor. Beginners get a turnkey solution to growing wealth in options, experienced investors gain savvy guidance for fine-tuning their practices, and professional investors learn how to effectively incorporate options into a portfolio.
Understanding valuation in this perceptive light lets you earn the consistent profi ts of The Intelligent Option Investor.
The Intelligent Option Investor is the hands-on guide to using a cuttingedge valuation framework in the fast-paced options market to boost growth, protect gains, and generate income.
It explains how to use your insightful human mind to recognize when mechanized options pricing undervalues a stock. Once you see an opportunity, you'll have all the tools you need to execute a fact-based decision about how and when to invest in the company.
Have your money make the most for you with the potent blend of timehonored value investing strategies and hot options vehicles in The Intelligent Option Investor.
PRAISE FOR THE INTELLIGENT OPTION INVESTOR:
"The Intelligent Option Investor reflects Erik's keen understanding of how companies create value for their owners, which is essential to successful option investing. In addition to showcasing Erik's expertise in developing option investment strategies based on fundamental security analysis and a long-term time horizon, this book delivers the information in a way that’s accessible to individual investors, offering them the resources to use options to help them meet their financial goals." -- JOE MANSUETO, founder, chairman, and CEO, Morningstar, Inc.
"Erik knows--and lays out here--that to use options successfully, you need to understand the underlying stock and its valuation first. This is one of few books on options that teaches this fruitful, combined approach. And that's why it works." -- JEFF FISCHER, advisor, Motley Fool Options
Table of contents
- Title Page
- Copyright Page
Part I: Options for the Intelligent Investor
- Chapter 1: Option Fundamentals
- Chapter 2: The Black-Scholes-Merton Model
- Chapter 3: The Intelligent Investor’s Guide to Option Pricing
Part II: A Sound Intellectual Framework for Assessing Value
- Chapter 4: The Golden Rule of Valuation
- Chapter 5: The Four Drivers of Value
- Chapter 6: Understanding and Overcoming Investing Pitfalls
Part III: Intelligent Option Investing
- Chapter 7: Finding Mispriced Options
- Chapter 8: Understanding and Managing Leverage
- Chapter 9: Gaining Exposure
- Chapter 10: Accepting Exposure
- Chapter 11: Mixing Exposure
- Chapter 12: Risk and the Intelligent Option Investor
- Appendix A: Choose Your Battles Wisely
- Appendix B: The Many Faces of Leverage
- Appendix C: Put-Call Parity
- About the Author
- Title: The Intelligent Option Investor: Applying Value Investing to the World of Options
- Release date: August 2014
- Publisher(s): McGraw-Hill
- ISBN: 9780071833660
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