Options Made Simple
Description
An option is a binding contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a 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 or conservative 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 they need to know about trading options ¨C including what can go wrong! ¨C and can work out which strategies they are most comfortable with.
Jacqueline Clarke is a qualified accountant and trader of shares and derivatives. Together with Davin, Jacqueline manages their extensive trading business as their primary source of income.
Davin Clarke is a well-known and highly successful private trader. He is a popular and sought]after speaker and has featured in several books, including The Wiley Trading Guide and 20 Most Common Trading Mistakes and How You Can Avoid Them.
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Content
- Options Made Simple: Simple, Easy to Understand Strategies Anyone can use for Success!
- Contents
- About the authors
- Chapter 1: What are options?
- What are options?
- Options versus shares
- Chapter summary
- Chapter 2: Advantages and risks
- Advantages of option trading
- Risks of option trading
- Chapter summary
- Chapter 3: Types of options
- Summary of call options and put options
- Option buyers (takers)
- Option sellers (writers)
- Call options
- Put options
- Company issued options
- Index options
- Chapter summary
- Chapter 4: Option pricing
- Stock pricing versus option pricing
- Intrinsic value
- Time value
- Pricing models
- Pay-off diagrams
- Chapter summary
- Chapter 5: The mechanics: how to buy, sell and exercise options
- Opening a position
- Closing a position
- Options clearing
- Option settlement
- Exercising an option
- Trading costs
- Margins
- Opening an options account
- Market makers
- Chapter summary
- Chapter 6: Buying options: the scenarios
- Buying options
- Buying a call option
- Buying a put option
- Chapter summary
- Chapter 7: Selling options: the scenarios
- Selling options
- Selling a covered call option
- Selling a naked call option
- Selling a put option
- Chapter summary
- Chapter 8: Choosing your option strategy
- Movement in price
- Time decay
- Volatility
- Chapter summary
- Chapter 9: Strategies for buying call options
- Buying call options
- Risks and disadvantages of buying call options
- Selecting your call option
- Chapter summary
- Chapter 10: Strategies for buying put options
- Buying put options
- Risks and disadvantages of buying put options
- Selecting your put option
- Chapter summary
- Chapter 11: Strategies for selling covered call options
- Selling call options
- Selling covered call options
- Risks and disadvantages of selling covered call options
- Selecting your covered call option
- Chapter summary
- Chapter 12: Strategies for selling naked call options
- Selling naked call options
- Naked call option strategies
- Risks and disadvantages of selling naked call options
- Chapter summary
- Chapter 13: Strategies for selling put options
- Selling put options
- Risks and disadvantages of selling put options
- Selling put options strategies
- Chapter summary
- Chapter 14: Advanced strategies: using multiple option spreads
- Multiple option strategies
- Bull spread
- Bull put spread
- Bear spreads
- Bear call spread
- Ratio call spread
- Calendar spread
- Chapter summary
- Chapter 15: Advanced strategies: straddles and strangles
- Option straddle strategy
- Option strangle strategies
- Chapter summary
- Appendix
- Glossary
- Index
