The Short Book On Options:
A Conservative Strategy For The Buy And Hold Investor
By
Mark D. Wolfinger
Click here to see a detailed picture of both the front and back covers.
Commentary by R. V. Green of Briefing.com
Briefing.com
(Robert V. Green) wrote:
"A great introduction for those new to options - but with some innovative ideas for those already familiar with options - how to use calls to effectively sell stock at prices higher than the current market price." Robert V. Green, Briefing.com
For the full review, click here
Synopsis:
The Short Book On Options is just that – a concise easy to understand primer that first teaches the basics of stock options and then offers a hands-on approach to using options in a conservative manner.
Beginning with a description of what an option is and how an option works, The Short Book On Options takes the reader on a journey from learning the language of options to being prepared to trade. The book provides detailed answers to these important questions:
- Why would you want to sell a stock option?
- What do you have to gain?
- What do you have to lose?
- How do you choose which option to sell?
The Short Book On Options is especially useful for long-term buy and hold investors, owners of a self-directed retirement plan, investment club members – or anyone who wants to increase the performance and safety of his investment portfolio. The author teaches a conservative strategy focusing on profitability and safety.
By the time you finish reading this book, you will be eager to make your first options trade and ready to do so.
Excerpt:
The majority of the investing public, and I assume you are in that group, are unaware of the possible benefits you can gain from the conservative use of stock options. This book presents a simple technique for using stock options that you can apply to your own stock portfolio. Under most market conditions, if you adopt this strategy, you can produce substantial additional income. This trading tool is not some closely guarded secret, although it might as well be, since most investors do not know this easily understood strategy is available.
By the time you finish reading this book you will know how to use options to:
- Increase the probability of making a profit on your stock holdings
- Provide your portfolio with some protection, if your stocks go down in price
This book is for you, if you are a buy and hold investor. You learn how to gain an advantage over your current methods. Those investors who know how to use options have an edge over those who don’t.
This book is for you, if you are an investor who does your own research and decides for yourself which stocks to buy.
This book is for you, if you are a member of an investment club. As investors interested in growth and who carefully research which stocks to own, investment club members are in a position to benefit from the use of call options.
This book is for you, if you have a self-directed retirement account. The investment technique taught in these pages is the only option strategy considered sufficiently conservative for individual investors to use in retirement accounts. It is especially useful for these accounts, where earnings are allowed to compound year after year. If you take advantage of the strategy outlined in this volume, those extra earnings make your financially secure retirement more likely.
Negative publicity has hounded options trading since the market in tulip options collapsed in the 17th century. Today, many people turn away from options, and decline when offered the opportunity to learn how to use them. Thus, investors are not aware of the benefits to be gained from using stock options. The truth is, options can be used conservatively to produce additional earnings, but many people mistakenly believe only speculators use options
There are some people who make a living by promoting options as a get-rich-quick mechanism. There are others who make outrageous claims about potential profits and charge exorbitant fees for seminars. I make no such claims. I am only telling you that by using options there is a high probability your investment account will be more profitable than a similar account that does not use options. In order to gain this additional income, you must give up something. This book includes a discussion of what you have to sacrifice in order to obtain the benefits of using options. This very conservative option strategy has some risk, and that risk is discussed in this book.
The strategy that I teach in this volume is not for everyone, but if you invest in individual stocks, this book will be an eye-opener for you. If you give up the small chance to make a bonanza on any particular stock, you gain a high probability chance to earn a significant additional profit on each of your stock holdings.
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The Short Book on Options: Table of Contents
Introduction
Chapter 1. Recent Options Trading History
Chapter 2. Options Basics
Optionspeak
What is an option?
How does an option work?
Options in our daily lives
Chapter 3. The Options When Using An Option
Exercising the option
Allowing the option to expire
Selling the option
Chapter 4. Stock Options
Trading call or put options
Getting started trading options
Chapter 5. Why Enter An Option Order?
Why would you want to sell a call option?
What do you have to gain?
What do you have to lose?
What can go wrong?
Does this strategy really make a difference?
Chapter 6. Let’s Take A Look At The Arithmetic
Expiration possibilities
You made your profit, but what did it cost you?
Chapter 7. How Options Are Priced
Theoretical value
Chapter 8. The Numbers
The tables of data
Chapter 9. Volatility
Option premium is dependent on implied volatility
What you can discover from the data. Part 1
Chapter 10. Which Call Option Do You Sell?
Conservative or aggressive options strategy?
Message One to the buy and hold investor
The more conservative positions
What you can discover from the data. Part 2
Message Two to the buy and hold investor
After the call sale, then what?
What if you don’t own stock?
What if your stock doesn’t have listed options?
Chapter 11. Rolling The Position
Rolling as a defensive move
Rolling for opportunity
Chapter 12. Buy Low; Sell High
Sell stock at a higher price
Buy stock at a lower price
Chapter 13. Psychology
Chapter 14. LEAPS
Long Term Equity AnticiPation Series
Chapter 15. Investment Clubs
Chapter 16. Option Quotes
Where do you find option quotes?
Chapter 17. Conclusion
Appendix A. Glossary
Appendix B. Calculations
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