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Understanding Options 2E

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Written in an accessible, easy-to-read style, this new edition of Understanding Options provides everything you need to get started on the right foot in the increasingly popular options market.

You'll learn what options are and how they work, their pros and cons, their relationship with stocks, and how to use them to gain leverage, generate extra income, and protect against adverse price movements. Understanding Options covers everything that has made it the go-to guide for novice investors—plus it has brand-new information and features, including:

  • Updated facts, charts, and figures
  • Expanded coverage of collars, credit and debit spreads, mini-options, the Greeks, and protective puts
  • Key strategy insights from master options traders
  • A critical look at trading options on ETFs

Options simply are not as confusing as the other books make them seem. Written specifically for the novice, Understanding Options is the best, most inviting guide available for building a solid foundation in options investing.

ISBN-13: 9780071817844

Media Type: Paperback

Publisher: McGraw Hill LLC

Publication Date: 01-10-2014

Pages: 320

Product Dimensions: 5.50(w) x 8.30(h) x 0.80(d)

Michael Sincere is a full-time columnist, writer, and author of numerous books, including Understanding Stocks and All About Market Indicators.

Table of Contents

Preface xi

Part 1 What You Need to Know First

1 Welcome to the Options Market 3

2 How to Open an Options Account 13

3 The Fascinating Characteristics of Options 19

Part 2 Selling Covered Calls

4 The Joy of Selling (Writing) Covered Calls 35

5 How to Choose the Right Covered Call 49

6 Step-by-Step: Selling Covered Calls 59

7 Managing Your Covered Call Position 73

8 Assignment: Your Obligation to Sell 83

Part 3 How to Buy Calls

9 Introduction to Call Strategies 91

10 How to Choose the Right Call Option 99

11 Volatility and Options Pricing 109

12 Step-by-Step: Buying Calls 123

13 Managing Your Call Position 137

14 Exercise: Your Right to Buy 143

Part 4 How to Buy Puts

15 How to Choose the Right Put Option 151

16 Managing Your Put Position 161

17 Protective and Married Puts 171

18 The Collar 177

Part 5 Intermediate and Advanced Strategies

19 Credit and Debit Spreads 187

20 Buying Straddles and Strangles 219

21 Selling Cash-Secured and Naked Puts 229

22 Delta and the Other Greeks 239

23 Trading Options with ETFs, Indexes, Weeklys, and Mini-Options 251

24 Advanced Strategies 257

Part 6 Sincere Advice

25 Sheldon Natenberg: Professional Options Trader 267

26 Where to Get Help 275

27 Lessons I Learned About Options 283

Index 287

Acknowledgments 297

About the Author 299