Learn trading ideas & strategies from TradeKing's experts

Upcoming Live Events
More live events...
Learn it. Trade it.

Open your TradeKing account today!

Upcoming Live Events
More live events...

The Options Playbook

by Brian Overby

Buy this book

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.

Related Strategies

218 Long Put Image
Long Put A long put gives you the right to sell the underlying stock at strike price A. If there were no such thing as puts, the only way to benefit from a downward movement in...

219 Fig Leaf Image
Fig Leaf This strategy acts like a covered call but uses a LEAPS call as a surrogate for owning the stock. Though the two plays are similar, managing options with two different...

523 Long Inverse ETF
Long Inverse ETF The concept behind inverse ETFs seems quite simple – emphasis on “seems”. When the underlying target index goes down, the value of the ETF is designed to go up. The...

More strategies...

All-Star Analysis

532 RC: Types of Orders - Stop and Stop Limit orders on 01/02/2011

Do Wall Street Films Lead to Stock Market Crashes? on 01/29/2014
Here’s a funny chart you may’ve missed by the Bond Vigilantes, who noticed that big Hollywood films about the stock market have correlated...

$100 promotion on 06/28/2012
Join over 250,000 traders who get award-winning customer service and cutting-edge tools - all for only $4.95 a trade....

More analysis...

On-Demand Videos

2274 Trading with TradeKing's Platform
Trading with TradeKing's Platform

If you are new to TradeKing, this is a video just for you! Watch as Mike Rasmussen reviews our trading platform and...


2235 Calendar Spread Trading in a High Volatility Environment
Calendar Spread Trading in a High Volatility Environment

There are many varieties of long calendar spreads, but the most common is buying a longer-term call or put and...


503 OPB Series 7: What is Volatility?
What is Volatility?

In the 7th installment of his Options Playbook series, sit in with Brian Overby as he discusses and defines...


More videos...