Options

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.

https://youtu.be/8bgrgLB3Mx4

Autorentext
Michael C. Thomsett, Business Writer

Inhalt
Part I: The Basics 1

Chapter 1: Calls and Puts: Defining the Field of Play 3

Equity Investments 3

Debt Investments 4

Investments with No Tangible Value: Options 5

Trading Options on Exchanges 7

Calls and Puts 10

The Call Option 13

The Long-Term Call Option 20

Investment Standards for Call Buyers 21

How Call Selling Works 22

The Put Option 26

Option Valuation 32

Picking the Right Stock 37

Intrinsic Value and Time Value 38

Chapter 2: The Life of an Option 45

Expiration and Exercise 45

What is Clearing? 46

Bid and Ask 47

Order Entry 48

Types of Orders 49

Who Are the Players? 49

Chapter 3: Opening and Tracking: How It All Works 51

Terms of the Option (Standardized Terms) 51

Strike Price 51

Expiration Date 52

Type of Option 53

Underlying Stock 54

A Note on the Expiration Cycle 54

Opening and Closing Option Trades 56

Using the Daily Options Listings 56

Understanding Option Abbreviations 59

Calculating the Rate of Return for Sellers 61

Chapter 4: Buying Calls: Maximizing the Rosy View 65

Understanding the Limited Life of the Call 66

Judging the Call 70

Call Buying Strategies 76

Strategy 1: Calls for Leverage 76

Strategy 2: Limiting Risks 80

Strategy 3: Planning Future Purchases 81

Strategy 4: Insuring Profits 82

Strategy 5: Premium Buying 84

Strategy 6: Pure Speculation 85

Defining Profit Zones 87

Chapter 5: Buying Puts: The Positive Side of Pessimism 93

The Limited Life of the Put 95

Judging the Put 101

Put Buying Strategies 106

Strategy 1: Gaining Leverage 107

Strategy 2: Limiting Risks 109

Strategy 3: Hedging a Long Position 110

Strategy 4: Pure Speculation 114

Defining Profit Zones 115

Chapter 6: Selling Calls: Conservative and Profitable 119

Selling Uncovered Calls 121

Assessing Uncovered Call Writing Risks 126

A Question of Suitability 127

Selling Covered Calls 129

Assessing Covered Call Writing Risks 133 Calculating the Rate of Return **134</stron...