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Options made simple: A beginner's guide to trading options for success

Book Description

The sixth book in the Wrightbooks Made Simple series, Options Made Simple is an uncomplicated guide to tradingoptions for beginners. This book outlines some simple, easy to understand strategies anyone can use to start tradingoptions. The book will be a succinct paperback with lower price point, and provide the perfect first step into tradingoptions.

An option is a binding contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset ata specific price on or before a certain date ?C it has strictly defined terms and properties.

Options are very versatile and allow you to change your position according to the situation ?C they can be speculative orconservative depending on your trading strategy, but the risk can be mitigated by having a firm basic understanding.

The Made Simple series is the perfect vehicle for this content as readers are taken step?\by?\step through everything theyneed to know about trading options ?C including what can go wrong! ?C and can work out which strategies they are mostcomfortable with.

Table of Contents

  1. Cover
  2. Table of Contents
  3. Title Page
  4. About the authors
  5. Chapter 1: What are options?
    1. What are options?
    2. Options versus shares
    3. Chapter summary
  6. Chapter 2: Advantages and risks
    1. Advantages of option trading
    2. Risks of option trading
    3. Chapter summary
  7. Chapter 3: Types of options
    1. Summary of call options and put options
    2. Option buyers (takers)
    3. Option sellers (writers)
    4. Call options
    5. Put options
    6. Company issued options
    7. Index options
    8. Chapter summary
  8. Chapter 4: Option pricing
    1. Stock pricing versus option pricing
    2. Intrinsic value
    3. Time value
    4. Pricing models
    5. Pay-off diagrams
    6. Chapter summary
  9. Chapter 5: The mechanics: how to buy, sell and exercise options
    1. Opening a position
    2. Closing a position
    3. Options clearing
    4. Option settlement
    5. Exercising an option
    6. Trading costs
    7. Margins
    8. Opening an options account
    9. Market makers
    10. Chapter summary
  10. Chapter 6: Buying options: the scenarios
    1. Buying options
    2. Buying a call option
    3. Buying a put option
    4. Chapter summary
  11. Chapter 7: Selling options: the scenarios
    1. Selling options
    2. Selling a covered call option
    3. Selling a naked call option
    4. Selling a put option
    5. Chapter summary
  12. Chapter 8: Choosing your option strategy
    1. Movement in price
    2. Time decay
    3. Volatility
    4. Chapter summary
  13. Chapter 9: Strategies for buying call options
    1. Buying call options
    2. Risks and disadvantages of buying call options
    3. Selecting your call option
    4. Chapter summary
  14. Chapter 10: Strategies for buying put options
    1. Buying put options
    2. Risks and disadvantages of buying put options
    3. Selecting your put option
    4. Chapter summary
  15. Chapter 11: Strategies for selling covered call options
    1. Selling call options
    2. Selling covered call options
    3. Risks and disadvantages of selling covered call options
    4. Selecting your covered call option
    5. Chapter summary
  16. Chapter 12: Strategies for selling naked call options
    1. Selling naked call options
    2. Naked call option strategies
    3. Risks and disadvantages of selling naked call options
    4. Chapter summary
  17. Chapter 13: Strategies for selling put options
    1. Selling put options
    2. Risks and disadvantages of selling put options
    3. Selling put options strategies
    4. Chapter summary
  18. Chapter 14: Advanced strategies: using multiple option spreads
    1. Multiple option strategies
    2. Bull spread
    3. Bull put spread
    4. Bear spreads
    5. Bear call spread
    6. Ratio call spread
    7. Calendar spread
    8. Chapter summary
  19. Chapter 15: Advanced strategies: straddles and strangles
    1. Option straddle strategy
    2. Option strangle strategies
    3. Chapter summary
  20. Appendix