Overview

An “installment strategy” in its most basic form, combines two options, one long-term position and one short-term. This strategy is designed as a conservative, no-cost method to either eliminate risk for future trading when stock is owned; or to fix the price for a future purchase of the underlying security. Portfolio managers and experienced individual traders face a chronic problem – risk versus time. This goes beyond the well-known time decay of options and expands to the ever-present market risk to an underlying security. How do you execute a successful, conservative strategy and eliminate or reduce market risk? In this book, a range of effective and creative strategies set out a conservative hedging system.  This involves the combination of long-term long positions offset by short-term short positions in various configurations. Options Installment Strategies presents variations on the well-known calendar spread and demonstrates how specific strategieswork well in short-term swings and even during extended periods of consolidation.

Full Product Details

Author:   Michael C. Thomsett
Publisher:   Springer Nature Switzerland AG
Imprint:   Springer Nature Switzerland AG
Edition:   1st ed. 2018
Weight:   0.454kg
ISBN:  

9783030404208

ISBN 10:   303040420
Pages:   192
Publication Date:   20 February 2020
Audience:   Professional and scholarly ,  Professional & Vocational
Format:   Paperback
Publisher's Status:   Active
Availability:   Manufactured on demand  
We will order this item for you from a manufactured on demand supplier.

Table of Contents

Table of Contents   Preface – Why a Contingent Method? List of Figures and Tables Chapter 1 – Chart-Based Trade Timing             The Key to Profitable Trades             Advantageous Price Levels             Price Patterns             Candlesticks (Eastern)             Western Price Indicators Non-price signals             Strong Fundamental Trends Chapter 2 – Proximity and Risk             Proximity and Moneyness             Proximity to Expiration             Proximity of Price to Resistance or Support             Strongest Reversal Proximity             Proximity in Consolidation Trends             Risks in Every Strategy             Collateral Requirements             Options and Market Risk Chapter 3 – Picking the Right Stock             Fundamental Risk             The Effect of Fundamental Trends on Options Risk             Contingent Purchase and Stock Selection             Contingent Sales as Risk Hedges of Stock             Dividend Yield and Trends Debt to Total Capitalization Ratio and Trend             P/E Annual Ranges             Revenue and Earnings Trends Chapter 4 – Timing with Well-Selected Technical Signals             Entry and Exit Timing             Resistance and Support Bollinger Bands T-Line Gaps and Tops or Bottoms Rounded Tops or Bottoms and Island Reversals             Candlestick Reversal             Candlestick Continuation             Volume Indicators             Momentum Oscillators             Moving Averages Chapter 5 – Long-Term Market Risk Elimination             The Nature of Underlying Risk             The Risk Hedge with Long Puts             The Trade: Long-Term Long Put and Short-Term Short Positions             Calculating the Point of Risk Elimination             Possible Outcomes Chapter 6 – Long-Term Contingent Purchase             Locking in the Future Price             The Risk Hedge for Future Purchase             Calculating the Point of Risk Elimination             Possible Outcomes Chapter 7 – Short Options and Levels of Risk             Unavoidable Risks             Covered Calls for Risk Reduction             Uncovered Puts for the Same Risk Profile             Uncovered Calls and Varying Risk Levels             Picking Calls or Puts Based on Price Proximity             Exploiting Time Decay Chapter 8 – Alternative Offsets Beyond Short Calls or Short Puts             Synthetic Stock             Vertical and Diagonal Spreads             Straddles and Strangles             Iron butterfly             Closing the Long-Term Option at a Profit Chapter 9 – Combining the Short Offset Alternatives             Current price proximity Historical Volatility Combining the Alternatives Multiple Increments and Combinations Chapter 10 – Expanding the Strategies             Rolling techniques             Long Collars             Long-Term Long Straddles and Strangles             Short-Term Short Straddles, Strangles and Spreads             Covered straddle and strangles Straps and Strips             Multiple Option Contracts Chapter 11 – Managing Potential Losses             Short Positions at Risk             The Advantage of Time Decay             Reducing Risk Exposure: Moneyness and Timing             Avoiding Ex-Dividend Periods             Avoiding Earnings Week             Short-Term Expiration Advantages Chapter 12 – Recovery Strategies             Protective and Responsive Loss Offsets             Selective Rolling             Closing and Taking Losses             Entering New Positions with Higher Risks             Expanding Exposed Spread Positions Chapter 13 – The Flexibility of Options Hedging             The Hedging and Leverage Advantage             Installment Variations Based on Changing Conditions                     Adjusting to Sudden Price Movement             Reducing Risks with Long-Term Hedging Bibliography Index

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Author Information

Michael C. Thomsett has been writing for a living since 1978 and has published more than 90 books. These include 12 options books. His best-selling Getting Started in Options has been published in ten editions and sold more than 300,000 copies. The 10th edition has been renamed Options (The Essential Guide for Getting Started in Derivatives Trading).  He also has developed and presented options webinars, and operates a financial education website, Money Craft. Thomsett is a frequent speaker at trade shows and investment conventions. He blogs on Seeking Alpha, Options Money Maker, Steady Options and other social media.

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