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Think Like an Option Trader: How to Profit by Moving from Stocks to Options

Think Like an Option Trader: How to Profit by Moving from Stocks to Options

          
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About the Book

THE SECRET TO PROFITING FROM OPTIONS: THINK LIKE A PROFESSIONAL OPTION TRADER, NOT A STOCK TRADER! Understand the unique dynamics of options trades and markets Practical, concise insights based on actual option trading scenarios Master trade selection, risk management, and more By professional options trader Michael Benklifa, best-selling author of Profiting with Iron Condor Options Want to win in options? You must think like a professional option trader. Step #1: Get rid of the habits you learned in stock trading: they’re killing you! Step #2: Understand the real dynamics of options markets: they are radically, fundamentally different.   Example: When stock traders look at price, they see information. Option traders see probability, time, and volatility. Example: Stock trading is about having an information advantage. Option trading can be about exploiting a lack of information. Example: Stocks either go up or they don’t. Option trades can be structured for a 90% probability of success.   With dynamics like these, option trading is like nothing else. Through practical, simple examples, Michael Benklifa will help you understand what’s really going on here…so you can consistently build trades that earn profits and control risk!

Table of Contents:
Preface   xi Introduction: Why Traders Fail   1 Is Failure a Flaw? 2 Blaming Emotions   2 Blaming Systems   3 Successful Traders Versus Successful Trading   5 Trading for a Living   6 Trade for the Right Reasons   6 The Ability to Duplicate a Strategy   7 Correlation Versus Causation   7 Don’t Trade to Make Money   9 Leverage   10 What Kind of Trader Are You?   10 A Single Difference Goes a Long Way   11 A Limited Worldview   13 Chapter 1   Understanding Options   15 What Is a Stock?   15 What Is an Option?   18 The Bet You Wouldn’t Make   18 The Options Trader’s Toolbox   22 Chapter 2  What Is Price?   33 How a Stock Trader Looks at Stock Price   33 How Options Traders Look at Stock Price   37 How an Options Trader Looks at an Option’s Price   48 Chapter 3  Pure Options Trading: Building Your Own Trade   67 Basic Greek Concepts   69 Build 1: Making a Directionless Trade   74 Build 2: Reducing Your Risk   78 Build 3: Augmented Returns   88 Bending the Curve   95 The Options Trader’s Toolbox: Synthetic Straddles   96 Evolving a Trade   98 In-, At-, and Out-of-the-Money Trades   98 Chapter 4  Situational Trading   99 Known Knowns   100 Analyzing Situations   105 Building a Directional Trade   106 Known Unknowns   126 Unknown Unknowns   137 Chapter 5  Risk Management   157 Responsibility in Trading   157 Strategy Is Risk Management   159 How a Stock Trader Measures Risk   160 Defined Risk for Options Traders   163 Layering and Unlayering Trades   164 Trades Cannot Be Fixed, Just Replaced   165 Portfolio Risk   166 Concluding Remarks   168 Appendix: Quantum Physics and Trading—The Price Uncertainty Principle   171 Index   175


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Product Details
  • ISBN-13: 9780133065305
  • Publisher: Pearson Education (US)
  • Publisher Imprint: Financial TImes Prentice Hall
  • Depth: 19
  • Language: English
  • Returnable: N
  • Spine Width: 21 mm
  • Weight: 420 gr
  • ISBN-10: 0133065308
  • Publisher Date: 27 Jun 2013
  • Binding: Hardback
  • Height: 235 mm
  • No of Pages: 208
  • Series Title: English
  • Sub Title: How to Profit by Moving from Stocks to Options
  • Width: 159 mm


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Think Like an Option Trader: How to Profit by Moving from Stocks to Options
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Think Like an Option Trader: How to Profit by Moving from Stocks to Options
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