Study Guide for the Fourth Edition of Options as a Strategic Investment

Overview

The market in listed options and non-equity 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 ...
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Overview

The market in listed options and non-equity 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 in 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.

This blockbuster bestseller--more than 100,000 copies sold--is considered to be the bible of options trading. Now completely revised and updated to encompass all the latest options trading vehicles, it supplies traders and serious investors with an abundance of new, strategic opportunities for managing their investments. Examples make clear the power of each strategy in carefully defined market condition.

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Editorial Reviews

booknews.com
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.
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.
Booknews
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. Annotation c. Book News, Inc., Portland, OR (booknews.com)
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Product Details

  • ISBN-13: 9780735202382
  • Publisher: Prentice Hall Press
  • Publication date: 3/1/2002
  • Edition description: 4TH STUDY, WORKBOOK
  • Edition number: 4
  • Pages: 1
  • Product dimensions: 7.06 (w) x 9.18 (h) x 0.56 (d)

Table of Contents

Preface
Pt. I Basic Properties of Stock Options
Ch. 1 Definitions 3
Pt. II Call Option Strategies
Ch. 2 Covered Call Writing 39
Ch. 3 Call Buying 95
Ch. 4 Other Call Buying Strategies 118
Ch. 5 Naked Call Writing 132
Ch. 6 Ratio Call Writing 146
Ch. 7 Bull Spreads 172
Ch. 8 Bear Spreads Using Call Options 186
Ch. 9 Calendar Spreads 191
Ch. 10 The Butterfly Spread 200
Ch. 11 Ratio Call Spreads 210
Ch. 12 Combining Calendar and Ratio Spreads 222
Ch. 13 Reverse Spreads 230
Ch. 14 Diagonalizing a Spread 236
Pt. III Put Option Strategies
Ch. 15 Put Option Basics 245
Ch. 16 Put Option Buying 256
Ch. 17 Put Buying a Conjunction with Common Stock Ownership 271
Ch. 18 Buying Puts in Conjunction with Call Purchases 281
Ch. 19 The Sale of a Put 292
Ch. 20 The Sale of a Straddle 302
Ch. 21 Synthetic Stock Positions Created by Puts and Calls 321
Ch. 22 Basic Put Spreads 329
Ch. 23 Spreads Combining Calls and Puts 336
Ch. 24 Ratio Spreads Using Puts 358
Ch. 25 LEAPS 367
Pt. IV Additional Considerations
Ch. 26 Buying Options and Treasury Bills 413
Ch. 27 Arbitrage 422
Ch. 28 Mathematical Applications 456
Pt. V Index Options and Futures
Ch. 29 Introduction to Index Option Products and Futures 493
Ch. 30 Stock Index Hedging Strategies 531
Ch. 31 Index Spreading 579
Ch. 32 Structured Products 589
Ch. 33 Mathematical Considerations for Index Products 641
Ch. 34 Futures and Futures Options 652
Ch. 35 Futures Option Strategies for Futures Spreads 696
Pt. VI Measuring and Trading Volatility
Ch. 36 The Basics of Volatility Trading 727
Ch. 37 How Volatility Affects Popular Strategies 749
Ch. 38 The Distribution of Stock Prices 783
Ch. 39 Volatility Trading Techniques 812
Ch. 40 Advanced Concepts 846
Ch. 41 Taxes 908
Ch. 42 The Best Strategy? 932
Postscript 938
Pt. VII Appendices
App. A Strategy Summary 943
App. B Equivalent Positions 945
App. C Formulae 947
App. D Graphs 957
App. E Qualified Covered Calls 961
Glossary 963
Index 983
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