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Introduction to Trading and Investing with Options (Collection) by Michael C. Thomsett, W. Edward Olmstead, Guy Cohen

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3. Options in Context

Option risks affect how you proceed; perceptions, sometimes false, can inhibit you from taking full advantage of the conservative potential of options. This chapter provides valuable details about designing conservative short positions, special margin requirements for option strategies, and calculating option returns on a comparative basis.

Any investment strategy—from plain to exotic—contains specific attributes and can be defined in terms of risk, rates of return, and strategies for various market conditions. Options are probably the most flexible investment products available. You can use them alone, in combination with other options, or as hedge devices to protect stock positions. Options can help you to exploit ...

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