Options Trading For Dummies

When it comes to boosting your portfolio, you've got options!

Looking for a new way to flex your investing muscle? Look no further! Options Trading For Dummies offers trusted guidance for anyone ready to jump into the versatile, rewarding world of stock options. And just what are your options options? This book breaks down the most common types of options contracts, helping you select the right strategy for your needs. Learn all about the risk-reward structure of options trading and reduce your risk through smart mixing and matching.

Today's markets are more topsy turvy than ever before, but there is also more potential for everyday investors like you to profit, regardless of economic conditions. Options are great for broadening your retirement portfolio or earning a little extra scratch through shorter-term positions. Options Trading For Dummies is your plain-English resource for learning how!

• Demystify the world of options contracts and how to trade them, including index, equity, and ETF options
• Use technical analysis to create a solid trading strategy that limits your risk
• Protect your assets and avoid the pitfalls common to first-time options traders
• Learn about covered calls, butterfly positions, and other techniques that can enhance your gains

Thinking of trading options, but not sure where to start? This latest edition of Options Trading For Dummies provides you with step-by-step advice for boosting your income under today's market conditions.

Auteur

Dr. Joe Duarte is a financial ­writer, private investor and trader, and former money manager/president of River Willow Capital Management. In addition to Options Trading For Dummies, he is the author of Trading Futures For Dummies and Market Timing For Dummies. Visit his website at joeduarteinthemoneyoptions.com

Texte du rabat

**Swap options like a Wall Street pro

Ding, ding, ding, ding, ding! That's the sound of your options trades paying off, thanks to the trading know-how to be found inside Options Trading For Dummies. Calls, puts, strike prices, breakevens-it's all explained right here, so you can start playing up, down, and sideways markets like your own personal money-making violin. A more balanced, strategic, and-of course-lucrative portfolio is music to your ears, right? Let For Dummies be your no-nonsense mentor as you jump into the options fray! **Inside...

• Find out about index, equity, and ETF options
• Uncover basic and advanced trades
• Profit from market down­turns
• Assess risk and reward
• Understand the basics to technical and sector analysis
• Use options to protect your assets
• Discover your personal trading style

Résumé
When it comes to boosting your portfolio, you've got options! Looking for a new way to flex your investing muscle? Look no further! Options Trading For Dummies offers trusted guidance for anyone ready to jump into the versatile, rewarding world of stock options. And just what are your options options? This book breaks down the most common types of options contracts, helping you select the right strategy for your needs. Learn all about the risk-reward structure of options trading and reduce your risk through smart mixing and matching. Today's markets are more topsy turvy than ever before, but there is also more potential for everyday investors like you to profit, regardless of economic conditions. Options are great for broadening your retirement portfolio or earning a little extra scratch through shorter-term positions. Options Trading For Dummies is your plain-English resource for learning how! Demystify the world of options contracts and how to trade them, including index, equity, and ETF options Use technical analysis to create a solid trading strategy that limits your risk Protect your assets and avoid the pitfalls common to first-time options traders Learn about covered calls, butterfly positions, and other techniques that can enhance your gains Thinking of trading options, but not sure where to start? This latest edition of Options Trading For Dummies provides you with step-by-step advice for boosting your income under today's market conditions.

Contenu

Introduction 1

About This Book 2

Foolish Assumptions 3

Icons Used in This Book 4

Beyond the Book 5

Where to Go from Here 5

Part 1: Getting Started with Options Trading 7

Chapter 1: Options Trading and You, the Individual Investor 9

Rewiring Your Thinking 10

Preparing to Trade: Take a Pre-Trading Flight Check 11

Understanding Options 12

Getting the complete picture 13

Knowing option essentials 14

Trying different strategies before deploying them in real time 16

Putting options in their place 18

Differentiating between Option Styles 19

Using options to limit your risk 19

Applying options to sector investing 20

Using Options in Challenging Markets 21

Reducing your directional bias and making money in flat markets 21

Controlling your emotions 21

Chapter 2: Introducing Options 23

Understanding Option Contracts 23

Tuning in to option basics 24

Comparing options to other securities 26

Valuing Options 27

Knowing your rights and obligations as an options trader 28

Identifying useful terms of endearment 28

Making Sense of Options Mechanics 30

Identifying options 30

Rotating with the expiration cycle 31

Making a decision: Expiration time is key 32

Detailing your rights 33

Creating Option Contracts out of Thin Air 33

Opening and closing positions 34

Selling an option you don't own 35

Keeping Some Tips in Mind 36

Chapter 3: Trading Places: Where the Action Happens 39

Identifying the U.S Options Exchanges 40

Navigating the Markets 40

Executing trades 41

Naming the option market participants 42

Eyeing transactions and orders unique to options 43

Making sure you know these trading rules 44

Weighing Option Costs and Benefits 47

Recognizing option risks 47

Identifying costs unique to options 48

Valuing options benefits 49

Grasping Key Option Pricing Factors 52

Introducing option Greeks 53

Connecting past movement to the future 54

Chapter 4: Identifying Option Risks and Rewards 57

Understanding Your Trading Risks 58

Risking money with stocks 58

Calculating option risks 61

Reaping Your Rewards 62

Benefiting from stocks 62

Breaking even with options 63

Profiling Risk and Reward 65

Profiling stock trades with risk graphs 66

Profiling option trades with risk graphs 67

Combining option positions 69

Considering the worst-case scenario 71

Part 2: Evaluating Markets, Sectors, and Strategies 73

Chapter 5: Looking Closer Inside the Algo-Controlled Market 75

Considering a Few Words about Select Macro Factors 76

Assessing the Market's (the Algos') Bias 77

Judging the strength of a move 78

(Psycho)-analyzing the market 84

Watching Call and Put Extremes 87

Understanding put/call ratios 88

Using Volatility to Measure Fear 90

Measuring volatility 90

Recognizing impact from changing volatility 90

Spelling fear the Wall Street way: V-I-X 91

Chapter 6: Sector Analysis: Technical and Fundamental 93

Getting Technical with Charts 94

Understanding chart basics 94

Adjusting your time horizon for the best view 95

Visualizing supply and demand 96

Identifying Relatively Strong Sectors 99

Relative ratios 99

Rate of change indicator 102

Using Sector Volatility Tools 104

Displaying volatility with indicators 105

Analyzing volatility with Bollinger Bands 109

Projecting Prices for Trading 111

Support and resistance 111

Trends 113

Channels 115

Price retracements and extensions 117

Projections and probabilities 119

Chapter 7: Practicing Before You Swing…