Options as a Strategic Investment
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The market in listed options and nonequity option products provides investors and traders with a wealth of new, strategic opportunities for managing their investments. This updated and revised Third Edition of the bestselling options book of all time gives you the latest market-tested tools for maximizing the earnings potential of your portfolio while reducing downside risk--no matter how the market is performing.Inside this expanded edition are scores of proven techniques and business-tested tactics for investing many of the innovative new options products available. For example, you'll find: -Buy and sell strategies for Long Term Equity Anticipation Securities (LEAPs) -A thorough analysis of neutral trading, how it works, and various ways it can improve your overall profit picture -Detailed guidance for investing in Preferred Equity Redemption Cumulative Stocks (PERCS),and how to hedge them with common and regular options -An extensive overview of futures and futures options -and much more Written especially for investors who have some familiarity with the option market, this comprehensive reference also shows you the concepts and applications of various option strategies--how they work, in which situations, and why...techniques for using index options and futures to protect your portfolio and improve your return...and the implications of the tax laws for option writers, including allowable long-term gains and losses. In addition, detailed examples, exhibits, and checklists show you the power of each strategy under carefully described market conditions. Reference & Research Book News The new edition is revised to represent the latest trading vehicles and applications, including coverage of long-term equity anticipation securities LEAPs, preferred equity redemption cumulative stocks PERCs, neutral trading, futures options, warrants, and standard portfolio analysis of risk SPAN. The idea, of course, is to maximize earnings and reduce risk—no matter how the market is performing. Strategy techniques and examples show how to do it.
PrefacePt. IBasic Properties of Stock OptionsCh. 1Definitions3Pt. IICall Option StrategiesCh. 2Covered Call Writing39Ch. 3Call Buying95Ch. 4Other Call Buying Strategies118Ch. 5Naked Call Writing132Ch. 6Ratio Call Writing146Ch. 7Bull Spreads172Ch. 8Bear Spreads Using Call Options186Ch. 9Calendar Spreads191Ch. 10The Butterfly Spread200Ch. 11Ratio Call Spreads210Ch. 12Combining Calendar and Ratio Spreads222Ch. 13Reverse Spreads230Ch. 14Diagonalizing a Spread236Pt. IIIPut Option StrategiesCh. 15Put Option Basics245Ch. 16Put Option Buying256Ch. 17Put Buying a Conjunction with Common Stock Ownership271Ch. 18Buying Puts in Conjunction with Call Purchases281Ch. 19The Sale of a Put292Ch. 20The Sale of a Straddle302Ch. 21Synthetic Stock Positions Created by Puts and Calls321Ch. 22Basic Put Spreads329Ch. 23Spreads Combining Calls and Puts336Ch. 24Ratio Spreads Using Puts358Ch. 25LEAPS367Pt. IVAdditional ConsiderationsCh. 26Buying Options and Treasury Bills413Ch. 27Arbitrage422Ch. 28Mathematical Applications456Pt. VIndex Options and FuturesCh. 29Introduction to Index Option Products and Futures493Ch. 30Stock Index Hedging Strategies531Ch. 31Index Spreading579Ch. 32Structured Products589Ch. 33Mathematical Considerations for Index Products641Ch. 34Futures and Futures Options652Ch. 35Futures Option Strategies for Futures Spreads696Pt. VIMeasuring and Trading VolatilityCh. 36The Basics of Volatility Trading727Ch. 37How Volatility Affects Popular Strategies749Ch. 38The Distribution of Stock Prices783Ch. 39Volatility Trading Techniques812Ch. 40Advanced Concepts846Ch. 41Taxes908Ch. 42The Best Strategy?932Postscript938Pt. VIIAppendicesApp. AStrategy Summary943App. BEquivalent Positions945App. CFormulae947App. DGraphs957App. EQualified Covered Calls961Glossary963Index983
