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Options for the Beginner and Beyond: Unlock the Opportunities and Minimize the Risks

Options for the Beginner and Beyond: Unlock the Opportunities and Minimize the Risks

          
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About the Book

Master option trading strategies one step at a time! Options for the Beginner and Beyond, Second Edition teaches options through brief, carefully-paced lessons on option concepts and trading strategies, crystal-clear definitions, and plenty of real trading examples. Every lesson builds on the one preceding it, explaining options in plain English, and guiding you all the way to advanced strategies covered in no other introductory tutorial. Drawing on his extensive experience teaching options trading to beginners -- and five years editing a leading options newsletter -- W. Edward Olmstead shows how to systematically control your risk, protect your investments, and maximize your profits. This new Second Edition integrates new coverage of weekly options throughout, and presents updated tax strategies every options trader needs to know. Olmstead shows you how to do all this, and much more: Select options with high profit potential Enter and exit trades Choose brokers Work with the Greeks, risk graphs, and LEAPs Use vertical, event producing, and calendar spreads Trade covered calls, straddles, strangles, married puts, and collars Master these and other sophisticated strategies: naked options, stock substitutes, backspreads, butteryfly spreads, iron condors, and double diagonals Implement effective end-of-year tax strategies Day trade indexes with options Use delta-neutral trading Leverage the theory of maximum pain; implied volatility, and Black-Scholes

Table of Contents:
Contents Acknowledgments   xii About the Author   xiii Preface   xiv Section I Basic Concepts   1 Chapter 1 Introduction   3 Why Options?   3 The Basic Concept of Options   4 Major Differences Between Stocks and Options   4 A Detailed Explanation of Options   7 Comments   15 Chapter 2 Option Selection   17 What Is a Cheap Option?   17 Selecting a Call   20 Overall Evaluation   24 Selecting a Put   24 Chapter 3 Entering and Exiting Option Trades   25 Entering a Trade   27 Exiting a Trade   28 Chapter 4 The Greeks   31 Delta   31 Theta   35 Gamma   36 Vega   37 Rho   38 Chapter 5 Risk Graphs   39 Single Option Trade   40 Multiple Option Trade   42 Comments   44 Chapter 6 LEAPS and Weekly Options 45 LEAPS   46 Weekly Options   50 Chapter 7 Assignment Anxiety   53 Comments   55 Applications   56 Chapter 8 Broker Selection   59 Types of Brokers   59 Commissions   60 Trading Platform   61 Margin and Trading Limitations   62 Level 3 Trading   63 Live Broker Assistance   63 Comments   64 Chapter 9 Miscellaneous Tips   65 Time Is Money   65 Trading with the Trend   66 Risk Capital for Options Trading   66 Tracking Trades   67 Anticipating Events   68 Real-Time Quotes   68 Market Orders with Options   69 Options Calculator   69 Section II Trading Strategies   71 Chapter 10 Vertical Spreads   73 Debit Vertical Spreads   74 Credit Vertical Spreads   77 Comments   80 Vertical Spreads with Weekly Options   80 Chapter 11* Event-Producing Credit Spreads   81 Comments   87 Chapter 12 Calendar Spreads   89 The Rollout Maneuver   93 Comments   94 Calendar Spreads with Weekly Options   95 Chapter 13* Advanced Calendar Spreads   97 Volatility Skew Trades   97 Ratio Calendar Spread Trades   101 Deep-in-the-Money LEAPS Put Calendar Spreads   103 Diagonal Calendar Spread Trades   106 Chapter 14 Covered Calls   111 An Idealized Trade   112 A Realistic Trade   112 Covered Call Versus Naked Put   114 Comments   117 Covered Calls with Weekly Options   118 Chapter 15 Straddles and Strangles   121 The Straddle Trade   121 The Strangle Trade   127 Straddles and Strangles with Weekly Options   128 Chapter 16 Stock Repair and Stock Enhancement   131 Stock Repair Strategy   132 Stock Enhancement Strategy   135 Chapter 17 Married Puts   139 Comments   143 Married Puts with Weekly Options   143 Chapter 18 Collars   145 Comments   152 Chapter 19* Advanced Collars   155 Comments   162 Chapter 20 Naked Option Writing   163 The Risk of Naked Option Writing   164 Acquiring Stock with Naked Puts   168 Comment   169 Chapter 21 Stock Substitutes   171 Matching the Stock Delta   171 Synthetic Long Stock   171 Deep-in-the-Money Put   174 Deep-in-the-Money Call   176 Chapter 22 Backspreads   179 Comments   185 Backspreads with Weekly Options   185 Chapter 23 Butterfly Spreads   189 Standard Butterfly Trade   189 Butterfly Trade with Adjustments   192 Unbalanced Strikes Butterfly Trade   195 Unbalanced Contracts Butterfly Trade   197 Chapter 24 Iron Condors and Double Diagonals   201 The Iron Condor Trade   201 The Double Diagonal Trade   204 Comments   206 Iron Condors and Double Diagonals with Weekly Options   207 Chapter 25 An End-of-Year Tax Strategy   209 Tax Code Restrictions   209 Qualified Covered Calls   210 Basic Strategy   211 Follow-Up Variations   214 Comments   215 Section III Special Topics   217 Chapter 26* Day Trading an Index with Options   219 Comments   222 Chapter 27* Delta-Neutral Trading   223 Review of the Delta Concept   223 A Delta-Neutral Portfolio   225 Delta-Neutral Trading for a Profit   227 Chapter 28* Theory of Maximum Pain   229 Chapter 29* Implied Volatility and the Black-Scholes Formula   233 Historical Background 233 Implied Volatility   236 Applications of Implied Volatility   237 Comments   237 Chapter 30* The Put-Call Parity Relationship   239 Calls Cost More Than Puts   239 Applications of Put-Call Parity   242 Index 243


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Product Details
  • ISBN-13: 9780132655682
  • Publisher: Pearson Education (US)
  • Publisher Imprint: Financial TImes Prentice Hall
  • Depth: 19
  • Height: 228 mm
  • No of Pages: 272
  • Series Title: English
  • Sub Title: Unlock the Opportunities and Minimize the Risks
  • Width: 162 mm
  • ISBN-10: 0132655683
  • Publisher Date: 24 Jan 2013
  • Binding: Hardback
  • Edition: 2
  • Language: English
  • Returnable: N
  • Spine Width: 25 mm
  • Weight: 470 gr


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