The Options Trading Body of Knowledge: The Definitive Source for Information About the Options Industry

Description

“The author has written a truly complete reference book on options trading, from basics to strategies to taxes and theory. Newcomers to options can quickly find a clear explanation of terms or strategies they aren’t familiar with, and experienced traders can expand their understanding of how complex strategies are created.” --Jim Bittman, author, Trade Options Like a Professional   “For a new perspective about options, I recommend Michael Thomsett’s comprehensive The Options Trading Body of Knowledge. Traders at all levels will enjoy his easy-to-read style as he explains options from A to Z. The options industry has needed a reference like this for a long time.” --Marty Kearney, Senior Staff Instructor, The Options Institute   The Comprehensive, Up-to-Date Reference for Every Options Trader By Michael C. Thomsett, author of the global best-seller Getting Started in OptionsIlluminates virtually every technique and form of options trading--including options on futures and ETFsHelps you consistently choose the right options strategies and understand your true risks   Options offer investors multiple opportunities to enhance their profits. However, options trading is complex, and the sheer scope of available strategies can overwhelm traders. Today, options can support a wide range of strategies, from high risk to conservative. Moreover, options are available not only for stock equities but also for futures, indices, and mutual funds. To trade successfully, traders need an authoritative, up-to-date guide to all the strategies available to them. Now, renowned options expert and best-selling author Michael C. Thomsett has created the definitive reference for options traders at all levels of experience.   Thomsett systematically illuminates each key technique and strategy: how trades are structured, how to assess risk, and when each strategy is most applicable. For most strategies, Thomsett presents detailed tables and illustrations identifying profit zones, loss zones, and breakeven points.   This book thoroughly explains how option premium develops based on various elements of value, walks through the calculation of returns on options trading, discusses how federal taxation works in the options market, shows how stocks are picked for options trading, and provides a complete glossary and additional resources for traders. Thoroughly Comprehend Options Trading RisksSystematically evaluate risks associated with markets, volatility, inflation, taxation, portfolios, and knowledgeUnderstand All the Elements of Value in an Options Trade Master concepts ranging from time-to-expiration to implied volatilityUse the Right Strategies at the Right Time Know when to use covered calls, spreads, straddles, combinations, and synthetic positionsThe Options Marketplace: History, Evolution, and Trends Understand both the “forest” and the “trees”   Cover Contents Introduction Chapter 1 Market Overview The History of Options Trading Basics of Options—Standardized Terms Calls and Puts The Underlying Security Strike Price Expiration The Option Premium and Its Components Time to Expiration Volatility Intrinsic Value A Range of Strategies Endnotes Chapter 2 Market Risks Market and Volatility Risk Market Risk of Options Trading Variation of Option Strategy Risk Levels Inflation and Tax Risk Inflation Risk Tax Risk The Double Hit—Inflation and Taxes Portfolio and Knowledge/Experience Risks Portfolio Risk Knowledge/Experience Risk Diversification and Asset Allocation Risk Leverage Risk Chapter 3 Elements of Value Proximity and Price Expiration and Option Valuation Interest and Dividends Stock Selection as Part of the Option Value Equation Basic Investment Value of Stock Selection of Appropriate Option Positions Chapter 4 Return Calculations Expected Return and Pricing Models Annualized Return Strike Selection for Covered Calls Return if Exercised or Unchanged Return if Closed Chapter 5 Options and Stock Selection Diversification by Risk Profile Fundamental Selection Indicators Technical Selection Indicators Chapter 6 Option Taxation Capital Gains and Losses Qualified and Unqualified Covered Calls Rules for Offsetting Positions Strategic Considerations Chapter 7 Option Strategies A–C Chapter 8 Option Strategies D–P Chapter 9 Option Strategies R–Z Chapter 10 Online Resources American Stock Exchange (AMEX) Boston Stock Exchange Chicago Board Options Exchange (CBOE) International Securities Exchange (ISE) NASDAQ New York Stock Exchange (NYSE) Options Clearing Corporation (OCC) Options Industry Council Chapter 11 Option Print Resources Chapter 12 Option Glossary A B C D E F G H I J K L M N O P Q R S T U V W Y Z Appendix Options Listings Index A-C D-F G-I J-L M-O P-R S-T U-Z