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Your Options Handbook: The Practical Reference and Strategy Guide to Trading Options

Book Description

A comprehensive yet simplified guide to the complex world of options investing and risk management

Before trading derivatives, one needs to understand the secrets and mechanics behind the options market. Your Options Handbook: The Practical Reference and Strategy Guide to Trading Options offers a straightforward, practical explanation of the options marketplace, including its origins, the mechanics of the market, and how to profit from trading options.

  • Walks you through the stock and option markets from a professional's perspective, but uses plain language and simple analogies

  • Discusses different trading strategies based upon whether one's opinion of the market is bullish, bearish, or neutral

  • Details market players, useful tips, and trading psychology, and explains how options are priced

Options are a versatile trading instrument that typically cost less and can have lower risk than stocks. They also offer investors a unique edge and lucrative opportunities that are not available to stock only traders. Your Options Handbook helps investors fully understand the options market, allowing them to enter the sector with greater ease.

Table of Contents

  1. Cover
  2. Series
  3. Title Page
  4. Copyright
  5. Dedication
  6. Foreword
  7. Preface
    1. HOW AND WHY I BECAME A MARKET MAKER
    2. IT DOESN’T HAVE TO BE THAT COMPLICATED
    3. A CHANGING LANDSCAPE
  8. Acknowledgments
  9. Chapter 1: Market Basics and Market Mechanics
    1. THE MARKETS
    2. SECTORS AND INDUSTRIES
    3. ETFS—A DIFFERENT KIND OF INVESTMENT
    4. FINAL THOUGHTS
  10. Chapter 2: Data That Moves the Markets
    1. DATA AND SENTIMENT
    2. ECONOMISTS, PREDICTIONS, AND INDICATORS
    3. ECONOMIC INDICATORS
    4. KEY INDICATORS TO WATCH
    5. FINAL THOUGHTS
  11. Chapter 3: Fundamental and Technical Stock Analysis and Tools
    1. INTRODUCTION TO FUNDAMENTAL ANALYSIS
    2. DIGESTING THE NEWS
    3. CHEAP VERSUS VALUE
    4. MERGERS AND ACQUISITIONS FOR THE EVERYDAY OPTIONS TRADER
    5. THE WISDOM (OR LACK THEREOF) OF CROWDS
    6. TRADING TACTICS AND TECHNICAL ANALYSIS
    7. PLANS OF ATTACK
    8. NEW TRADER TIPS
    9. TOP 10 THINGS PROFESSIONALS DO THAT THE AVERAGE RETAIL TRADER DOESN’T
    10. FINAL THOUGHTS
  12. Chapter 4: Options Basics
    1. THE ORACLE OF OMAHA DID IT, WHY CAN’T I?
    2. THE BASICS
    3. TRADING OPTIONS—ORDER TYPES
    4. OPTIONS EXPIRATION IN DETAIL
    5. EXERCISE AND ASSIGNMENT
    6. WHEN SHOULD YOU EXERCISE AN OPTION EARLY?
    7. WHAT IS TRIPLE WITCHING? (OR QUADRUPLE WITCHING)
    8. FINAL THOUGHTS
  13. Chapter 5: The Greeks
    1. DELTA
    2. FINAL THOUGHTS
  14. Chapter 6: Strategy: The Basic Options Trades
    1. BASIC SINGLE OPTIONS STRATEGIES
    2. THE LONG CALL
    3. COVERED CALL (BUY-WRITE)
    4. BUY-WRITE VERSUS COVERED CALL
    5. LONG PUT
    6. BASIC STOCK AND OPTION SPREAD
    7. FINAL THOUGHTS
  15. Chapter 7: Strategy: The Basic Spread Trades
    1. VERTICAL SPREADS IN DEPTH
    2. THE FOUR BASIC VERTICAL SPREADS—BASIC CHARACTERISTICS AND BEHAVIOR
    3. CREDIT SPREADS VERSUS DEBIT SPREADS
    4. CREDIT VERTICAL SPREADS
    5. DEBIT VERTICAL SPREADS
    6. BUYING A PUT SPREAD (BEAR PUT SPREAD)
    7. BUYING A CALL SPREAD (BULL CALL SPREAD)
    8. MARKET DIRECTION NEUTRAL SPREAD STRATEGIES
    9. FINAL THOUGHTS
  16. Chapter 8: Strategy: The Advanced Option Spreads
    1. MARKET NEUTRAL, VOLATILITY, AND EARNINGS SPREAD STRATEGIES
    2. BUTTERFLIES VERSUS CONDORS
    3. IRON SPREADS
    4. IRON BUTTERFLY VERSUS IRON CONDOR
    5. FINAL THOUGHTS
  17. Chapter 9: Advanced Concepts
    1. PUT-CALL PARITY, INTEREST RATES, DIVIDENDS, AND FORWARDS
    2. SYNTHETICS AND MORE ON PUT-CALL PARITY
    3. FINAL THOUGHTS
  18. Chapter 10: A Revolutionary Approach to the Mind Games of the Markets
    1. TRADING IS LIKE WEATHER FORECASTING
    2. WHAT IS PSYCH CAP?
    3. STRATEGIES AND TACTICS FOR LARGE PSYCH CAP BALANCES
    4. ABOUT THE CONTRIBUTOR
  19. Chapter 11: Turning Your Trading into a Business
    1. LEARNING THE DOLLAR
    2. EDUCATION
    3. THE FORMATIVE PROCESS
    4. TIPS AND FORMULAS FOR BUDGETARY SUCCESS
    5. SETTING UP A LEGAL ENTITY
    6. GUIDELINES, INDICATORS, AND BIRDS OF PREY
    7. FINAL THOUGHTS
    8. ABOUT THE CONTRIBUTOR
  20. Notes
    1. CHAPTER 1 MARKET BASICS AND MARKET MECHANICS
    2. CHAPTER 2 DATA THAT MOVES THE MARKETS
    3. CHAPTER 3 FUNDAMENTAL AND TECHNICAL STOCK ANALYSIS AND TOOLS
    4. CHAPTER 4 OPTIONS BASICS
    5. CHAPTER 6 STRATEGY—THE BASIC OPTION TRADES
    6. CHAPTER 7 STRATEGY—THE BASIC SPREAD TRADES
    7. CHAPTER 8 STRATEGY—THE ADVANCED OPTION SPREADS
    8. CHAPTER 10 A REVOLUTIONARY APPROACH TO THE MIND GAMES OF THE MARKETS
    9. CHAPTER 11 TURNING YOUR TRADING INTO A BUSINESS
  21. About the Author
  22. Index