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Given the recent volatility in the markets over the past few years, there is a growing need for traders to learn how options can be used for better risk management. Using the right strategies and trade adjustments, creative investors can hedge or even boost their profits, limit their losses, and create risk-free trades. Although many investors understand how to trade stocks or options, very few know how to use options as a dynamic risk reduction and profile enhancement tool. Implementing these strategies requires more than just an understanding of the mechanics of trading, it requires ingenuity and imagination–as well as a comprehensive trading reference tool.
Designed as a resource for intermediate to advanced traders, The Option Trader Handbook teaches both the science and the art of trade management, and offers numerous strategies and techniques for minimizing risk and volatility. The authors, both recognized experts in the field, discuss stock and option positions and detail the various types of trade adjustments that can be made, what situations are appropriate for each adjustment, and the best time to make those adjustments.
With this book as your guide, you will find sensible answers to questions such as:
- What happens if my stock or option position does not move exactly as planned?
- Is there a way for me to lock in unrealized profits or provide a hedge against further losses?
- How can I create risk-free trades?
In a logical, sequential order, the authors cover the principles of risk and trade management as well as the tools required to put them into practice, weaving them all together with a proven formula for successful trading and portfolio management.
An unparalleled resource for today’s volatile investment climate, The Option Trader Handbook offers:
- A detailed guide for better trade and portfolio management
- Numerous trade adjustments for long and short stock positions, calls and puts, spreads and combinations
- Specific trading examples with numerous charts and graphs to clearly demonstrate how each trade adjustment is done
By demonstrating how options can be used to hedge risks and boost overall returns, The Option Trader Handbook will become one of the most valuable assets in any trader’s portfolio.
About the Author
GEORGE JABBOUR is the Director of the Master of Science in Finance (MSF) program at the George Washington University, as well as a professor of derivatives, financial engineering, and investments. Dr. Jabbour has published various articles in professional financial journals and regularly speaks at conferences in the United States and abroad regarding option pricing models, financial management, and risk management. He is also a managing director of Global Asset Investments, LLC, an asset management and derivative consulting firm, and CEO of Global Finance Associates, Inc., a financial training, consulting, and research company. Dr. Jabbour regularly conducts seminars in option trading and valuation, and is a very active equity and derivative trader.
PHILIP BUDWICK has a law degree and a master of science in finance, and frequently writes articles on option trading strategies and investments. Mr. Budwick is a managing director of Global Asset Investments, LLC, and a managing member of Budwick Investment Group, LLC, an option trading and investment software firm. He also conducts discussion groups and offers option investment training through Option Trading Coach, LLC, and is an active option and stock trader.
Table of Contents
Chapter 1. Trade and Risk Management.
Chapter 2. Tools of the Trader.
Chapter 3. Long Stock.
Chapter 4. Short Stock.
Chapter 5. Calls and Puts.
Chapter 6. Spreads.
Chapter 7. Combinations.