Authored by James Bittman, Sr. Staff Instructor at the Options Institute, Options for the Stock Investor, Second Edition introduces you to the many ways you can use options to generate cash flow, lower the cost basis of your stocks, increase your trading leverage, increase your profit potential and more.
Updated from its bestselling first edition to provide you with new option techniques and strategies, this comprehensive handbook explores:
- Risk-reduction strategies for conservative investors, including buying calls and covered writing
- Possible profit-generating strategies for aggressive traders, including vertical spreads, straddles, and strangles
- Flexible strategies for improving your risk-return profile, including covered straddles, covered combos and ratio spreads
Over the past decade, this bestseller has shown thousands of stock investors how to use options to protect their portfolios from bad earnings reports, management miscues, and other unexpected events. Over that same period, scores of new trading rules and products have made options more viable and valuable for traders as well as investors.
Options for the Stock Investor, Second Edition, is updated and expanded to detail the many ways in which options can help you improve your investing performance over both the short- and long-term. Featuring a number of new strategies you can use to enhance your investment performance, whatever your investment style, this hands-on guide provides you with:
- Step-by-step explanations of what options are and how they work
- Detailed examples of option behavior in a wide variety of market environments
- Diagrams to help you visualize the profit or loss potential of every trade before you place it
- Insights into the psychological differences between investing and trading
- Examples of ratio spreads and how they can be used as a possible “stock repair” for long positions or as a potentially higher-profit strategy for advanced traders
- Strategies for using options to possibly improve the performance of stock indices, LEAPS, and other popular investment vehicles
Op-Eval4™ software, provided free with Options for the Stock Investor, allows you to apply pricing formulas to options on individual stocks and indices, and options that are subject to both American- and European-style exercise. The features and capabilities of this program increase the transparency of each option trade you make, allowing you to analyze option prices, calculate theoretical option values, graph numerous option-only and option-stock strategies, and more.Option strategies entail risk and are not appropriate for everyone. Before trading options, you should review Characteristics and Risks of Standardized Options. Some option strategies involve multiple positions simultaneously. These multi-leg strategies incur additional commissions and may invoke special treatment when preparing your taxes. If you are unsure about how a particular strategy may impact your financial picture, please consult a tax professional before trading.