Overview

Brief, carefully paced lessons on options and trading strategies using verbal definitions and many trading examples for clarification. Each lesson builds on the one preceding it and explains options in plain English, from start to finish. Step-by-step coverage of controlling risk, protecting your investments -- even advanced strategies other introductory books ignore! Authored by Dr. W. Edward Olmstead, contributing editor to The Spear Report and editor of The Options Professor newsletter.

Full Product Details

Author:   W. Edward Olmstead
Publisher:   Pearson Education (US)
Imprint:   Financial TImes Prentice Hall
Dimensions:   Width: 23.60cm , Height: 2.30cm , Length: 16.10cm
Weight:   0.449kg
ISBN:  

9780131721289

ISBN 10:   0131721283
Pages:   256
Publication Date:   30 March 2006
Audience:   Professional and scholarly ,  Professional & Vocational
Replaced By:   9780132655682
Format:   Hardback
Publisher's Status:   Out of Print
Availability:   In Print  
Limited stock is available. It will be ordered for you and shipped pending supplier's limited stock.

Table of Contents

CONTENTS Acknowledgments About the Author Preface Section I:  BasicConcepts 1: Introduction Why Options? The Basic Concept of Options Major Differences Between Stocks and Options Leverage Time Limitation Price Movement Financial Risk A Detailed Explanation of Options The Option Contract The Call Option The Put Option Comments 2: Option Selection What Is a Cheap Option? Selecting a Call Overall Evaluation Selecting a Put 3: Entering and Exiting Option Trades  Entering a Trade Exiting a Trade 4: The Greeks Delta Computing the Delta of a Call Option Application of the Delta Computing the Delta of a Put Option Theta Gamma Vega Rho 5: Risk Graphs Single Option Trade Multiple Option Trade Comments 6: LEAPS Comments 7: Assignment Anxiety Comments Applications 8: Broker Selection Types of Brokers Commissions Trading Platform Margin and Trading Limitations Live Broker Assistance Comments 9: Miscellaneous Tips Time Is Money Trading with the Trend Risk Capital for Options Trading Tracking Trades Anticipating Events Real-Time Quotes Market Orders with Options Options Calculator Section II:  TradingStrategies 10: Vertical Spreads Debit Vertical Spreads Bull Call Spread Bear Put Spread Comments Credit Vertical Spreads Bull Put Spread Bear Call Spread Comments 11*: Event-Producing Credit Spreads Comments 12: Calendar Spreads The Rollout Maneuver Comments 13*: Advanced Calendar Spreads Volatility Skew Trades Comments Ratio Calendar Spread Trades Comments Deep-in-the-Money LEAPS Put Calendar Spreads Diagonal Calendar Spread Trades 14: Covered Calls An Idealized Trade A Realistic Trade Covered Call vs. Naked Put Comments 15: Straddles and Strangles The Straddle Trade Comments The Strangle Trade 16: Stock Repair and Stock Enhancement Stock Repair Strategy Comment Stock Enhancement Strategy 17: Married Puts Comments 18: Collars Comments 19*: Advanced Collars Comments 20: Naked Option Writing The Risk of Naked Option Writing Acquiring Stock with Naked Puts 21: Stock Substitutes Synthetic Long Stock Comments Deep-in-the-Money Put Deep-in-the-Money Call 22: Backspreads Comments 23: Butterfly Spreads Standard Butterfly Trade Comments Butterfly Trade with Adjustments Comment Unbalanced Butterfly Trade 24: Iron Condors and Double Diagonals The Iron Condor Trade The Double Diagonal Trade Comments 25: An End-of-Year Tax Strategy Tax Code Restrictions Qualified Covered Calls Basic Strategy Follow-Up Variations Comments Section III  SpecialTopics 26*: Day Trading an Index with Options Comments 27*: Delta-Neutral Trading 28*: Theory of Maximum Pain 29*: Implied Volatility and the Black-Scholes Formula Historical Background Derivation of the Black-Scholes Formula Application of the Black-Scholes Formula Implied Volatility Applications of Implied Volatility Comments 30*: THE PUT-CALL PARITY RELATIONSHIP Calls Cost More Than Puts Applications of Put-Call Parity ?*Chapters with more advanced content are marked with an asterisk and can be passed over by beginners during the first reading of this book. © Copyright Pearson Education. All rights reserved.

Reviews

Trader, professor and editor of a successful options newsletter Olmstead consolidates his vast knowledge and experience into this accessible guide to options. Appropriate for both beginners and more seasoned investors, this book covers everything from the basics of call and put options to advanced topics like delta-neutral trading and the Black-Scholes formula. Because buying options is cheaper and less risky than buying stocks, these time-limited investments are a great way to increase profits. Olmstead is a natural teacher, employing a concise, no-nonsense and easy-to-understand style. Readers will learn why time is money, how to use vertical spreads, how options can cut your tax bill and how to make profits even when you can't predict the market direction. Most importantly, Olmstead teaches how to think like an option trader, providing the market acumen necessary to maximize profit. Sure to be appreciated by options traders of all levels. --Kirkus Reviews, Vol. 3, Issue 3 (March 31, 2006)

Author Information

Dr. W. Edward Olmstead is the editor of The Options Professor, one of the world’s leading newsletters on options trading. He is also an options analyst for Spear Capital Management. He has consulted on short-term trading strategies with a member company of the Chicago Mercantile Exchange.   Dr. Olmstead is Professor of Applied Mathematics in the McCormick School of Engineering and Applied Sciences at Northwestern University. He has taught courses that cover both the theory for options pricing and practical strategies for trading options. Dr. Olmstead has received several awards including an endowed chair for teaching excellence and has been praised by his colleagues as “the quintessential teacher in our midst.”

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