Options Trading ( (Business & Personal Finance))

Title Page
Copyright Page
Table of Contents
Introduction
	About This Book
	Foolish Assumptions
	Icons Used in This Book
	Beyond the Book
	Where to Go from Here
Part 1 Getting Started with Options Trading
	Chapter 1 Options Trading and You, the Individual Investor
		Rewiring Your Thinking
		Preparing to Trade: Take a Pre-Trading Flight Check
		Understanding Options
			Getting the complete picture
			Knowing option essentials
			Trying different strategies before deploying them in real time
			Putting options in their place
		Differentiating between Option Styles
			Using options to limit your risk
			Applying options to sector investing
		Using Options in Challenging Markets
			Reducing your directional bias and making money in flat markets
			Controlling your emotions
	Chapter 2 Introducing Options
		Understanding Option Contracts
			Tuning in to option basics
			Comparing options to other securities
		Valuing Options
			Knowing your rights and obligations as an options trader
			Identifying useful terms of endearment
		Making Sense of Options Mechanics
			Identifying options
			Rotating with the expiration cycle
			Making a decision: Expiration time is key
			Detailing your rights
		Creating Option Contracts out of Thin Air
			Opening and closing positions
			Selling an option you don’t own
		Keeping Some Tips in Mind
	Chapter 3 Trading Places: Where the Action Happens
		Identifying the U.S. Options Exchanges
		Navigating the Markets
			Executing trades
			Naming the option market participants
			Eyeing transactions and orders unique to options
			Making sure you know these trading rules
		Weighing Option Costs and Benefits
			Recognizing option risks
			Identifying costs unique to options
			Valuing options benefits
		Grasping Key Option Pricing Factors
			Introducing option Greeks
			Connecting past movement to the future
	Chapter 4 Identifying Option Risks and Rewards
		Understanding Your Trading Risks
			Risking money with stocks
			Calculating option risks
		Reaping Your Rewards
			Benefiting from stocks
			Breaking even with options
		Profiling Risk and Reward
			Profiling stock trades with risk graphs
			Profiling option trades with risk graphs
			Combining option positions
			Considering the worst-case scenario
Part 2 Evaluating Markets, Sectors, and Strategies
	Chapter 5 Looking Closer Inside the Algo-Controlled Market
		Considering a Few Words about Select Macro Factors
		Assessing the Market’s (the Algos’) Bias
			Judging the strength of a move
			(Psycho)-analyzing the market
		Watching Call and Put Extremes
			Understanding put/call ratios
		Using Volatility to Measure Fear
			Measuring volatility
			Recognizing impact from changing volatility
			Spelling fear the Wall Street way: V-I-X
	Chapter 6 Sector Analysis: Technical and Fundamental
		Getting Technical with Charts
			Understanding chart basics
			Adjusting your time horizon for the best view
			Visualizing supply and demand
		Identifying Relatively Strong Sectors
			Relative ratios
			Rate of change indicator
		Using Sector Volatility Tools
			Displaying volatility with indicators
			Analyzing volatility with Bollinger Bands
		Projecting Prices for Trading
			Support and resistance
			Trends
			Channels
			Price retracements and extensions
			Projections and probabilities
	Chapter 7 Practicing Before You Swing
		Monitoring Option Greek Changes
			Tracking premium measures
			Changing volatility and option prices
		Making Sense of Paper Trading
			Eyeing the pros and cons to paper trading
			Implementing electronic paper trades
		Using Trading Systems
			Knowing what you’re getting
			Performing a backtest
			Adding risk management to a backtest
		Mastering Your Strategies
			Setting the right pace
			Achieving mastery through longevity
	Chapter 8 Designing a Killer Trading Plan
		Developing a Reliable Plan
		Managing Your Costs
		Optimizing Order Execution
			Understanding option orders
			Entering a new position
			Executing a quality trade
			Exiting an existing position
Part 3 What Every Trader Needs to Know about Options
	Chapter 9 Getting to Know Different Option Styles
		Delving Deeper into Index Options
			Getting to the nitty-gritty of indexes
			Capitalizing on an index with options
		Watching Out for Style Risk
			American-style options
			European-style options
			Considering the exceptions
		Exercising Your Options, American Style
			Knowing the nuts and bolts
			What you see is what you get
			To exercise or not, that is the question
		Exercising Your Options the Euro Way
			Tracking index settlement (the SET)
			Cashing in with exercise
		Satisfying Option Obligations
			American-style stock options
			Expiring options
			European-style options
		Breaking It Down: American-Style Index Options
			Exercising rights
			Meeting obligations
	Chapter 10 Protecting Your Portfolio with Options
		Putting Protection on Long Stock
			Combining puts with long stock
			Weighing protection cost versus time
		Limiting Short Stock Risk with Calls
			Protecting a short stock position
			Further reducing short stock risk
		Hedging Your Bets with Options
			Protecting a portfolio . . . partially
			Protecting a portfolio . . . completely
		Avoiding Adjusted Option Risk
			Justifying option adjustments
			Adjusting from adjustments
	Chapter 11 Increasing Profit Potential and Decreasing Risk
		Leveraging Assets to Reduce Risk
			Determining your total dollars at risk
			Relying on market timing
		Combining Options to Reduce Risk
			Spreading the risk with a debit trade
			Spreading the risk with a credit trade
	Chapter 12 Combination Strategies: Spreads and Other Wild Things
		Combining Options with Stocks
			Creating covered positions
			Covering the covered call position
			Reducing protected stock costs
		Varying Vertical Spreads
			Changing your vertical spread risk profile
			Spreading time with calendars
	Chapter 13 Understanding ETFs, Options, and Other Useful Tricks
		Exploring the Exchange-Traded Fund
			Comparing ETFs to indexes
			Distinguishing ETF and index options
		Reducing Portfolio Volatility with ETFs
			Revisiting volatility
			Investing with ETFs
		Tilting Your Portfolio with Sector ETFs
			Adding sector ETFs to tilt your portfolio
			Selecting the right strategy
Part 4 Advanced Strategies for Options Traders
	Chapter 14 Making Money without Worrying About the Market’s Direction
		Limiting Directional Risk
			Capitalizing on a big move — A straddle
			Reducing straddle risk and reward — A strangle
		Examining a Neutral View versus a Neutral Position
			Identifying neutral positions
			Calculating delta for combination positions
		Trading with Delta
			Monitoring two key Greeks
			Creating a delta-neutral straddle
		Understanding Trade Adjustments
			Deciding when to adjust a trade
			Deciding how to adjust a trade
	Chapter 15 Letting Volatility Show You the Way to Trading Opportunities
		Analyzing Implied Volatility Levels
			It’s all relative but not overly scientific
			When options are skewed
		Understanding Ratio Spreads
			Reviewing ratio spread risk profiles
			Identifying best conditions for ratio spreads
			Deciding your strategy
		Using Ratio Backspreads
			Defining ratio backspreads
			Spotting best conditions for ratio backspreads
	Chapter 16 Trading Profitably When Markets Move Sideways
		Identifying Winning Positions in Sideways Markets
			Managing existing positions
			Identifying other option strategies for sideways moves
		Understanding Butterfly Positions
			Defining the butterfly
			Digging deeper into butterfly risk
			Creating an iron butterfly
		Understanding Condor Positions
			Defining a condor spread
			Recognizing condor risks
Part 5 The Part of Tens
	Chapter 17 Ten Top Option Strategies
		Married Put
		Collar
		Long Put Trader
		LEAPS Call Investor
		Diagonal Spread
		Bear Call Credit Spread
		Straddle
		Call Ratio Backspread
		Put Ratio Backspread
		Long Put Butterfly
	Chapter 18 Ten Do’s and Don’ts in Options Trading
		Do Focus on Managing Risk
		Don’t Avoid Losses
		Do Trade with Discipline
		Don’t Expect to Remove Your Emotions
		Do Have a Plan
		Do Be Patient
		Don’t Suffer from Analysis Paralysis
		Do Take Responsibility for Your Results
		Don’t Stop Learning
		Do Love the Game
Index
EULA