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The Options Playbook

by Brian Overby

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The Options Playbook was created to demystify option trading and teach investors different option plays for all market conditions. No confusing jargon. No unnecessary mumbo-jumbo. Just clear, easy-to-understand explanations of more than 40 of the most popular option strategies broken down into a play-by-play format including:

  • Play Name: Covered call, Long put, Iron condor, etc.

  • The Setup: The goals and reasons to run each play

  • Who Should Run It: Rookies, Veterans or All-Stars, based on degree of difficulty

  • When To Run It: Describes each play as bullish, bearish or neutral

  • The Strategy: A detailed overview of each strategy and their risks

For the first-time option trader, The Options Playbook features a "Rookie's Corner," addressing the basic definitions and concepts you need to understand this market, tips to avoid common beginner’s mistakes, and suggested strategies to "get your feet wet".

For more experienced option traders, an expanded section on implied volatility explains how this handy variable can be used to estimate the potential range of the stock over the options life. A detailed section on pricing variables (Greeks) helps you understand how an option’s price is affected by changes in market conditions. Although their forecasts are not guaranteed, implied volatility and the Greeks may provide experienced traders a way to estimate option changes due to market factors. You’ll also learn how time decay and a change in implied volatility can affect your trade after it’s in place and how to recover if things don’t go according to plan.

The Options Playbook features Options Guy Tips from TradeKing Senior Analyst Brian Overby. Like any good coach, Overby’s handy insights help you put theory into successful real-world trading.

This expanded second edition includes 10 new plays and 56 new pages of handy content describing a brief history of options, five common mistakes options traders make and how to avoid them, an expanded glossary, and how to manage option positions by rolling to a different month and strike. Also explained are the differences between index and equity options, managing early exercise and assignment, and how to calculate position delta and use it to manage overall position risk.

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.

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All-Star Analysis

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#retirement-investing-center p { line-height: 18px; } #retirement-investing-center { width: 648px...

Unrealized loss on 05/16/2011
for a given securities position, a paper loss that has not become real since a closing transaction has not occurred.

Set me straight on writers, sellers, buyers, and holders on 08/26/2013
Howdy,I'm just now beginning to learn about options by reading from various websites, books, etc..I feel like I'm not quite grasping a...

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On-Demand Videos

501 Condors vs. Butterflies: Is there an
Condors vs. Butterflies: Is There an "Ideal" Strategy, part 1

Join Nicole Wachs as she compares and contrasts these popular strategies. For each play, she covers the basics, main...


34243 Choose Your Strategy part 3 image 154x116.png
How to Choose Your Strategy, part 3: Aligning Your Outlook with the Greeks

Sit in with Nicole Wachs as she dispenses common-sense explanations of the Greeks during the third meeting of her...


44632 Diagonal Spreads 154x116.png
Diagonal Spreads: Setup, Risks, and Uses

Join Brian Overby for Part 19 of his Options Playbook series where he discusses how to set up diagonal spreads as a...


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