Trading Realities: The Truth, the Lies, and the Hype In-Between

Preface xiii......Page 14
First Principles 1......Page 16
Trade Imbalances, Fiscal Policy, and the Average Investor 5......Page 20
Strong Dollar, Weak Stock Market9......Page 24
Identifying Critical Information 23......Page 38
Meaningful Insights and Unique Views 25......Page 40
Swimming Upstream 29......Page 44
The  Long TermŽ Fallacy34......Page 49
Don t  Buy the DipsŽ 36......Page 51
Misconceptions about Risk 38......Page 53
The Perils of Earning Interest 41......Page 56
Better Than Forecast 49......Page 64
Intentionally Misleading 56......Page 71
Bet with the House 59......Page 74
Highly Efficient Markets 63......Page 78
The Technical Charting Fallacy 66......Page 81
Decorating the Chart69......Page 84
Predicting Reversals 82......Page 97
Identifying a Financial Bubble 84......Page 99
Exaggerations in the Financial News 92......Page 107
Waiting for Confirmation 96......Page 111
Spotting a Major Reset 98......Page 113
An Ongoing Catastrophe as a Trend 103......Page 118
Summary 115......Page 130
Introduction117......Page 132
Relevant History for a New Era124......Page 139
Other Recent Corrections 132......Page 147
Cause Versus Symptom 135......Page 150
Characteristics of the New Era 136......Page 151
Problems with Technical Analysis in the Modern Era 143......Page 158
Summary 151......Page 166
Introduction155......Page 170
Fooled by Randomness 156......Page 171
Studying Price Change Behavior161......Page 176
Calculating Volatility 164......Page 179
The CBOE Volatility Index 168......Page 183
A New Indicator for Predicting Market Corrections169......Page 184
Trading Volatility 172......Page 187
The Most Common Mistake 175......Page 190
A Few Simple Dynamics 185......Page 200
Diversification Versus Hedging 190......Page 205
Collars 192......Page 207
Vertical Bull Spreads 199......Page 214
Covered Calls 201......Page 216
Weekly Options„An Unprecedented Opportunity203......Page 218
Selling At-the-Money Puts 205......Page 220
Synthetic Stock208......Page 223
Deep In-the-Money Puts and Calls 210......Page 225
Stock Replacement Summary 215......Page 230
Evolving Strategies 217......Page 232
Appendix A: Options Primer 225......Page 240
Black-Scholes Pricing Model226......Page 241
Calls and Puts228......Page 243
Implied Versus Historical Volatility 230......Page 245
Skewed Volatility„The Volatility  SmileŽ 236......Page 251
Term Structure 238......Page 253
The Greeks 239......Page 254
Summary 248......Page 263
Index 251......Page 266