Your Options Handbook The Practical Reference and Strategy Guide to Trading Options

by Levy, Jared; Douglas, Mark

• ISBN13: 9780470603628
• ISBN10: 0470603623
• Edition: 1st
• Format: Hardcover
• Copyright: 2011-04-05
• Publisher: Wiley

Summary

Before you trade derivatives, you need to know where they derive their prices from. In Your Options Playbook, you will learn the mechanics of the market and how to profit from trading options. The book is a straightforward and practical explanation of the options market and its origins. Author Jared Levy discusses the functions of the exchanges and how they work. Using plain language and simple analogies, he walks the reader through the market- the players and pricing. After delving into the basics, Levy provides you with the strategies and analysis to take advantage of the market.Your Options Playbook also provides trading strategies based on your trading opinions and types- from neutral to bullish or bearish. You choose what 2018bet' you want to make based upon the facts presented and the opinion you have moving forward. Each Strategy will have its characteristics listed at the beginning of its section and several specific variations of parameters depending on what the viewers' opinion is not only about the stock, but about other factors, including risk, the overall market and volatility.

Author Biography

Jared A. Levy got his start trading as an options market maker and specialist in the pits of the Philadelphia and American Stock Exchanges in the '90s. Now as an exclusive CNBC contributor, he offers his commentary to the world as part of CNBC's Fast Money team and appears on several programs throughout the network. Jared is also featured and quoted in numerous industry publications both online and in print. He has been featured on Bloomberg, Fox, and several other radio and TV networks over the years. In 2006, he won an Emmy for his daily video, "Trader Cast." More recently, he served as the Senior Derivatives Specialist for PEAK6 Investments, L.P., and is currently an editor for Taipan Publishing Group.

Through his many seminars and courses, Jared Levy has educated tens of thousands of investors on how to successfully and consistently trade and invest for a living, while keeping risk low. He teaches a practical, straightforward approach to investing that involves analyzing equities, derivatives, and the markets as a whole, as well as both simple and complex strategies and the use of diverse instruments.

Table of Contents

Foreword	p. xi
Preface	p. xv
Acknowledgments	p. xxvii
Market Basics and Market Mechanics: What Is Going On and How Does It All Work?	p. 1
The Markets	p. 1
Sectors and Industries	p. 9
ETFs-A Different Kind of Investment	p. 12
Final Thoughts	p. 16
Data That Moves the Markets: The First Step in Your Analysis	p. 17
Data and Sentiment	p. 18
Economists, Predictions, and Indicators	p. 18
Economic Indicators	p. 21
Key Indicators to Watch	p. 27
Final Thoughts	p. 43
Fundamental and Technical Stock Analysis and Tools: The Second Step in Your Analysis	p. 45
Introduction to Fundamental Analysis	p. 46
Digesting the News	p. 57
Cheap versus Value	p. 61
Mergers and Acquisitions for the Everyday Options Trader	p. 64
The Wisdom (or Lack Thereof) of Crowds	p. 65
Trading Tactics and Technical Analysis	p. 67
Plans of Attack	p. 93
New Trader Tips	p. 101
Top 10 Things Professionals Do That the Average Retail Trader Doesn't	p. 104
Final Thoughts	p. 106
Options Basics: Techniques and Fundamentals to Master Before Applying Any Options Strategy	p. 107
The Oracle of Omaha Did It, Why Can't I?	p. 111
The Basics	p. 114
Trading Options-Order Types	p. 122
Options Expiration in Detail	p. 126
Exercise and Assignment	p. 128
When Should You Exercise an Option Early?	p. 132
What Is Triple Witching? (Or Quadruple Witching)	p. 134
Final Thoughts	p. 137
The Greeks: The Forces That Influence Options' Prices	p. 139
Delta	p. 139
Final Thoughts	p. 156
Strategy: The Basic Options Trades	p. 159
Basic Single Options Strategies	p. 160
The Long Call	p. 160
Covered Call (Buy-Write)	p. 171
Buy-Write versus Covered Call	p. 175
Long Put	p. 181
Basic Stock and Options Spread	p. 195
Final Thoughts	p. 208
Strategy: The Basic Spread Trades	p. 209
Vertical Spreads in Depth	p. 209
The Four Basic Vertical Spreads-Basic Characteristics and Behavior	p. 214
Credit Spreads versus Debit Spreads	p. 216
Credit Vertical Spreads	p. 219
Debit Vertical Spreads	p. 236
Buying a Put Spread (Bear Put Spread)	p. 237
Buying a Call Spread (Bull Call Spread)	p. 242
Market Direction Neutral Spread Strategies	p. 257
Final Thoughts	p. 271
Strategy: The Advanced Option Spreads	p. 273
Market Neutral, Volatility, and Earnings Spread Strategies	p. 273
Butterflies versus Condors	p. 281
Iron Spreads	p. 285
Iron Butterfly versus Iron Condor	p. 286
Final Thoughts	p. 309
Advanced Concepts	p. 311
Put-Call Parity, Interest Rates, Dividends, and Forwards	p. 312
Synthetics and More on Put-Call Parity	p. 316
Final Thoughts	p. 336
A Revolutionary Approach to the Mind Games of the Markets: Understand Why You Need Emotions to Trade Well	p. 337
Trading Is Like Weather Forecasting	p. 338
What Is Psych Cap?	p. 345
Strategies and Tactics for Large Psych Cap Balances	p. 352
About the Contributor	p. 359
Turning Your Trading into a Business	p. 361
Learning the Dollar	p. 362
Education	p. 362
The Formative Process	p. 363
Tips and Formulas for Budgetary Success	p. 364
Setting Up a Legal Entity	p. 366
Guidelines, Indicators, and Birds of Prey	p. 371
Final Thoughts	p. 381
About the Contributor	p. 381
Notes	p. 383
About the Author	p. 389
Index	p. 391
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