You are previewing Options Made Easy: Your Guide to Profitable Trading, Second Edition.
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Options Made Easy: Your Guide to Profitable Trading, Second Edition

Book Description

In Options Made Easy, Second Edition, Guy Cohen clearly explains everything you need to know about options in plain English so that you can start trading fast and make consistent profits in any market, bull or bear!

Simply and clearly, the author reveals secrets of options trading that were formerly limited to elite professionals–and exposes the dangerous myths that keep investors from profiting.

As you set out on your options journey, you'll learn interactively through real-life examples, anecdotes, case studies, and pictures. Guy Cohen is your friendly expert guide, helping you pick the right stocks, learn the right strategies, create the trading plans that work, and master the psychology of the winning trader.

  • Master all the essentials–and put them to work

    Options demystified so that you can get past the fear and start profiting!

  • Learn the safest ways to trade options

    Identify high-probability trades that lead to consistent profits

  • Design a winning Trading Plan–and stick to it

    Understand your risk profile and discover exactly when to enter and exit your trades

  • Choose the right stocks for maximum profit

    Screen for your best opportunities–stocks that are moving–or are about to move

  • Discover the optimum strategies for you

    Match your trading strategies to your personal investment goals

  • No bull! The realities and myths of the markets

    What you must know about fundamental and technical analysis

  • Table of Contents

    1. Copyright
    2. Acknowledgments
    3. About the Author
    4. Executive Summary
    5. Preface
    6. Introduction to Options
      1. Criteria for Successful Investing
      2. Risk Profile Charts
      3. The Definition of an Option
      4. The Valuation of Options
      5. Intrinsic and Time Value for Calls
      6. Intrinsic and Time Value for Puts
      7. The Seven Factors that Influence an Option’s Premium
      8. Risk Profile Charts for Call Options
      9. Risk Profile Charts for Put Options
      10. Memory Tips for Long and Short Calls and Puts
      11. Basic Risk Profiles Summary
      12. Chapter 1 Major Learning Points
    7. Into the Marketplace
      1. How to Read Option Prices
      2. Option Contracts
      3. Option Exchanges
      4. Option Expiration Dates
      5. Exercise Prices
      6. Option Ticker Symbols
      7. Margin
      8. Placing Your Trade Order
      9. Types of Order in the Market
      10. Time Limits with Trade Orders
      11. Always Have a STOP in Mind Whenever You Make a Trade
      12. Trading Tips
      13. Leverage and Gearing
      14. A Brief Introduction to Delta (Hedge Ratio)
      15. Chapter 2 Major Learning Points
    8. The Basics of Fundamental Analysis
      1. Past History and Management
      2. News and Results
      3. Sentiment and Expectations
      4. The Wider Economy
      5. Economic Indicators to Watch (USA Only)
      6. Bonds
      7. Supply and Demand
      8. Corporate Fundamentals
      9. Key Financial Terms
      10. Key Financial Figures and Ratios
      11. Search Criteria and Screening Filters for Fundamentals
      12. Common Sense and Being Alert
      13. Chapter 3 Major Learning Points
    9. The Basics of Technical Analysis
      1. Three Ways to View Price Patterns
      2. Basic Chart Patterns
      3. Support and Resistance
      4. Double and Triple Tops and Bottoms
      5. Head and Shoulders
      6. Reverse Head and Shoulders
      7. Consolidations—Pennants, Triangles, and Wedges
      8. Fibonacci Retracements
      9. Elliott Wave
      10. Gann Levels
      11. Gaps
      12. Volume
      13. Technical Analysis Indicators
      14. Moving Averages
      15. Moving Average Convergence Divergence (MACD)
      16. Stochastics
      17. The Relative Strength Index (RSI)
      18. Different Time Frames
      19. More Technical Analysis Terminology
      20. Chapter 4 Major Learning Points
    10. Two Popular Strategies and How to Improve Them
      1. The Synthetic Call
      2. The Covered Call (Covered Write or Buy Write)
      3. The Collar (or Protected Buy-Write)
      4. Chapter 5 Major Learning Points
    11. An Introduction to the Greeks
      1. The Greeks
      2. Delta Δ
      3. Gamma Γ
      4. Theta Θ
      5. Vega K (also known as Kappa or Lambda)
      6. Rho P
      7. Chapter 6 Major Learning Points
    12. Bull Call Spreads and Bull Put Spreads
      1. Bull Call Spreads
      2. Bull Put Spreads
      3. Advantages of Spreads—A Summary
      4. Chapter 7 Major Learning Points
    13. Two Basic Volatility Strategies
      1. Straddles
      2. Strangles
      3. Chapter 8 Major Learning Points
    14. Two Basic Sideways Strategies
      1. Butterflies
      2. Condors
      3. Comparison Between the Butterfly and the Condor
      4. Chapter 9 Major Learning Points
    15. Trading and Investing Psychology
      1. Myths and Realities
      2. Tips and Good Habits
      3. Your Optimal Mindset
      4. Money Management and Rule Making
      5. Chapter 10 Major Learning Points
    16. Putting It All Together—A Call to Action
      1. Step 1—Choose Your Favored Strategies (Keep It Simple!)
      2. Step 2—Set Your Filters
      3. Step 3—Designing Your Trading Plan for Each Entry and Exit
      4. Chapter 11 Major Learning Points
    17. Stock Futures and Options Strategies (Bonus Chapter)
      1. Futures Pricing
      2. Stock Futures and Options Strategies
    18. Strategy Table
    19. Glossary
    20. References and Recommended Reading
    21. Financial Times Press
    22. Financial Times Prentice Hall Books