Options trading for the conservative investor: increasing profits without increasing your risk
Saved in:
| Main Author: | |
|---|---|
| Format: | Book |
| Language: | English |
| Published: |
Upper Saddle River, NJ
Prentice Hall/Financial Times
2007
|
| Edition: | 5. printing |
| Series: | Financial Times Prentice Hall books
|
| Subjects: | |
| Online Access: | Inhaltsverzeichnis |
| Item Description: | Includes index. |
| Physical Description: | xxiii, 255 p. ill. 24 cm |
| ISBN: | 0131497855 |
Staff View
MARC
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| 245 | 1 | 0 | |a Options trading for the conservative investor |b increasing profits without increasing your risk |c Michael C. Thomsett |
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| 264 | 1 | |a Upper Saddle River, NJ |b Prentice Hall/Financial Times |c 2007 | |
| 300 | |a xxiii, 255 p. |b ill. |c 24 cm | ||
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| 500 | |a Includes index. | ||
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| 650 | 4 | |a Options (Finance) | |
| 650 | 4 | |a Investments | |
| 650 | 4 | |a Risk management | |
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| adam_text | CONTENTS
Preface
xvii
Acknowledgments
xxi
About the Author
xxiii
1
SETTING THE GROUND RULES
1
The Ground Rules
2
A Model Portfolio
4
2
OPTION BASICS
7
The Workings of Option Contracts
8
Option Attributes to Determine Value
9
Intrinsic and Time Value Premium
9
Long-Term
Options and Their Advantages
10
Strike Price of Options
11
The Time Advantage for Short Sellers
12
Long and Short
13
Taking Profits Without Selling Stock
14
Buyer and Seller Positions Compared
15
Understanding Short Seller Risks
16
Calls and Call Strategies
16
Is the Strategy Appropriate?
17
IX
Option
Terms and Their Meaning
18
The Cost of Trading
19
In, At, or Out of the Money
20
Puts and Put Strategies
22
The Overlooked Value of Puts
23
The Insurance Cost of Puts
24
Conservative Guidelines: Selling Puts
25
Puts as a Form of Contingent Purchase
26
Listed Options and LEAPS Options
27
Using Long Calls in Volatile Markets
28
Using LEAPS Puts in a Covered Capacity
30
Coordinating Strategies with Portfolio Goals
31
Option and Stock Vobtility: The Central Element of Risk
34
Critical Analysis of Volatility
35
Free 20-Minute Delayed Quotes
36
The Black-Scholes Model
37
Identifying Your Market Opportunities
38
Limiting Your Strategies to Conservative Plays
41
Identifying Quality of Earnings
43
Trading Costs in the Option Analysis
43
Calculating the Net Profit or Loss
44
Tax Rules for Options: An Overview
45
The Importance of Professional Advice and Tax Planning
46
3
OPTIONS IN CONTEXT
49
The Nature of Risk and Reward
50
Using Volatility as the Primary Risk Measurement
51
Options Used to Mitigate Stock Investment Risk
53
Another Kind of Volatility
55
Lost Opportunity Risk and Options
57
OPTIONS TRADING FOR THE CONSERVATIVE INVESTOR
Perceptions
About
Options
58
Finding the Conservative Context for Options Trading
58
Strategic Timing and Short-Term Price Changes
59
Short Positions, Naked or Covered
61
The Uncovered Call
—
A Violation of the Conservative
Theme, Usually
61
A Stock s Likely Lowest Theoretical Price Level
62
Short Put Risks
—
Not as Drastic as Short Call Risks
63
Margin Requirements and Trading Restrictions
65
Other Margin Rules
65
Return Calculations
—
Seeking Valid Comparisons
67
Return If Exercised
71
Return If Expired
74
Long-Term Goals as a Guiding Force
76
Exercise as a Desirable Outcome
78
4
MANAGING PROFITS AND LOSSES
83
Your Conservative Dilemma
85
Deciding How to Establish Your Policies
86
Managing Profits with Options
87
Basing Decisions on the Fundamentals
87
The Reality of Risk
89
Overcoming the Profit-Taking Problem
90
Realizing Profits Without Selling Stock
91
Further Defining Your Personal Investing Standards
92
When a Rescue Strategy Is Appropriate
94
Reverting to a Secondary Strategy
95
Managing the Inertia Problem
97
Inertia Management
98
Contents
Xl
Taxes
and Profits 100
Options Used for Riding Out Volatility
104
5
OPTIONS AS CASH GENERATORS
105
The Covered Call Concept
106
Who Makes the Decision?
107
Examples: Ten Stocb and Covered Calls
108
Working within Pre-Established Standards
109
Calculating the Gain Comparatively
110
Smart Conservative Ground Rules
114
A Conservative Approach
119
Tax Ramifications of Covered Calls
123
Six Levels of Separation (of Your Money) for Taxes
126
Rolling Forward and Up
—
Exercise Avoidance
128
The Types of Rolls
129
The Exercise Acceptance Strategy
131
Remembering to Limit Yourself to Conservative Strategies
131
6
ALTERNATIVES TO STOCK PURCHASE
133
Leverage and Options
134
Applications of Contingent-Purchase Strategies
136
The Long-Call Contingent-Purchase Strategy
138
Diversifying Exposure with Several Stocks in Play
138
Reducing Contingent Purchase Risks
141
The Covered Long Call
141
Extrapolating Future Strike Prices
142
Using the Forward Roll Effectively
145
Xli
OPTIONS TRADING FOR THE CONSERVATIVE INVESTOR
Short
Puts and Contingent Purchase
147
The Value of Selling Puts
147
The Value of Shorter Exposure Terms
149
Rescue Strategy Using Calls
151
Rescue Strategy Based on Smart Stock Choices
152
Programming a Profitable Result
154
The Ratio Write
—
Before Adjusting to Make It Conservative
154
Converting the Ratio Write into a Conservative Strategy
155
Ratio Writes for Rescue Strategies and Higher Current Returns
157
Rescue Strategy Using Puts
157
The Risk of Continued Price Declines
157
Covered Calls for Contingent Sale
159
Picking the Right Conditions for Forced Exercise
159
7
OPTION STRATEGIES IN DOWN MARKETS
161
Thinking Outside the Market Box
162
Remembering the Fundamentals
163
Conservative Versus Speculative: Remembering the Difference
164
The Long Put The Overlooked Option
165
When the Stock s Price Rises
165
When the Stock s Price Falls
168
Short Puts: A Variety of Strategies
169
Conservative Ground Rules for Short Puts
170
Comparing Rates of Return for Dissimilar Strike Prices
172
Three Types of Rescue Strategies
175
Using Calls in Down Markets
176
Calls Used for Leverage, but Not for Speculation
178
Evaluating Your Stock Positions
180
Rescue Strategies and Opportunity
180
Examining the Causes of Price Volatility
181
Contents
Xlii
Deciding When to Sell and Replace Stock
183
Stock Positions and Risk Evaluation
185
The Relationship Between Stock Safety and Options
185
Examining Your Risk Profile
186
Options and Downside Risk
187
The Down-Market Benefits of Options
187
Option Planning with Loss Carryover
190
Timing: Matching Current-Year Profits and Losses
190
8
COMBINATION CONSERVATIVE
TECHNIQUES
193
Spread Techniques
194
Advanced Spread Terminology
196
Straddle Techniques
197
Short Straddles for Conservative Positions and High Rates
of Return
197
Long or Short Positions
198
Mixing the Long and the Short
199
Theory Versus Practice
200
Simplicity as a Worthy Goal
201
Worst-Case Outcome as a Desirable Result
202
Tax Problems with Combination Strategies
203
The Anti-Straddle Rule and Its Effect
203
The Ultimate High-Return Strategy
204
A Review of Your Conservative Assumptions
205
Examples of the Strategy in Practice
206
Pick Your Portfolio
207
Pick Expiration Dates
207
XIV
OPTIONS TRADING FOR THE CONSERVATIVE INVESTOR
|
| adam_txt |
CONTENTS
Preface
xvii
Acknowledgments
xxi
About the Author
xxiii
1
SETTING THE GROUND RULES
1
The Ground Rules
2
A Model Portfolio
4
2
OPTION BASICS
7
The Workings of Option Contracts
8
Option Attributes to Determine Value
9
Intrinsic and Time Value Premium
9
Long-Term
Options and Their Advantages
10
Strike Price of Options
11
The Time Advantage for Short Sellers
12
Long and Short
13
Taking Profits Without Selling Stock
14
Buyer and Seller Positions Compared
15
Understanding Short Seller Risks
16
Calls and Call Strategies
16
Is the Strategy Appropriate?
17
IX
Option
Terms and Their Meaning
18
The Cost of Trading
19
In, At, or Out of the Money
20
Puts and Put Strategies
22
The Overlooked Value of Puts
23
The Insurance Cost of Puts
24
Conservative Guidelines: Selling Puts
25
Puts as a Form of Contingent Purchase
26
Listed Options and LEAPS Options
27
Using Long Calls in Volatile Markets
28
Using LEAPS Puts in a Covered Capacity
30
Coordinating Strategies with Portfolio Goals
31
Option and Stock Vobtility: The Central Element of Risk
34
Critical Analysis of Volatility
35
Free 20-Minute Delayed Quotes
36
The Black-Scholes Model
37
Identifying Your Market Opportunities
38
Limiting Your Strategies to Conservative Plays
41
Identifying Quality of Earnings
43
Trading Costs in the Option Analysis
43
Calculating the Net Profit or Loss
44
Tax Rules for Options: An Overview
45
The Importance of Professional Advice and Tax Planning
46
3
OPTIONS IN CONTEXT
49
The Nature of Risk and Reward
50
Using Volatility as the Primary Risk Measurement
51
Options Used to Mitigate Stock Investment Risk
53
Another Kind of Volatility
55
Lost Opportunity Risk and Options
57
OPTIONS TRADING FOR THE CONSERVATIVE INVESTOR
Perceptions
About
Options
58
Finding the Conservative Context for Options Trading
58
Strategic Timing and Short-Term Price Changes
59
Short Positions, Naked or Covered
61
The Uncovered Call
—
A Violation of the Conservative
Theme, Usually
61
A Stock's Likely Lowest Theoretical Price Level
62
Short Put Risks
—
Not as Drastic as Short Call Risks
63
Margin Requirements and Trading Restrictions
65
Other Margin Rules
65
Return Calculations
—
Seeking Valid Comparisons
67
Return If Exercised
71
Return If Expired
74
Long-Term Goals as a Guiding Force
76
Exercise as a Desirable Outcome
78
4
MANAGING PROFITS AND LOSSES
83
Your Conservative Dilemma
85
Deciding How to Establish Your Policies
86
Managing Profits with Options
87
Basing Decisions on the Fundamentals
87
The Reality of Risk
89
Overcoming the Profit-Taking Problem
90
Realizing Profits Without Selling Stock
91
Further Defining Your Personal Investing Standards
92
When a Rescue Strategy Is Appropriate
94
Reverting to a Secondary Strategy
95
Managing the Inertia Problem
97
Inertia Management
98
Contents
Xl
Taxes
and Profits 100
Options Used for Riding Out Volatility
104
5
OPTIONS AS CASH GENERATORS
105
The Covered Call Concept
106
Who Makes the Decision?
107
Examples: Ten Stocb and Covered Calls
108
Working within Pre-Established Standards
109
Calculating the Gain Comparatively
110
Smart Conservative Ground Rules
114
A Conservative Approach
119
Tax Ramifications of Covered Calls
123
Six Levels of Separation (of Your Money) for Taxes
126
Rolling Forward and Up
—
Exercise Avoidance
128
The Types of Rolls
129
The Exercise Acceptance Strategy
131
Remembering to Limit Yourself to Conservative Strategies
131
6
ALTERNATIVES TO STOCK PURCHASE
133
Leverage and Options
134
Applications of Contingent-Purchase Strategies
136
The Long-Call Contingent-Purchase Strategy
138
Diversifying Exposure with Several Stocks in Play
138
Reducing Contingent Purchase Risks
141
The Covered Long Call
141
Extrapolating Future Strike Prices
142
Using the Forward Roll Effectively
145
Xli
OPTIONS TRADING FOR THE CONSERVATIVE INVESTOR
Short
Puts and Contingent Purchase
147
The Value of Selling Puts
147
The Value of Shorter Exposure Terms
149
Rescue Strategy Using Calls
151
Rescue Strategy Based on Smart Stock Choices
152
Programming a Profitable Result
154
The Ratio Write
—
Before Adjusting to Make It Conservative
154
Converting the Ratio Write into a Conservative Strategy
155
Ratio Writes for Rescue Strategies and Higher Current Returns
157
Rescue Strategy Using Puts
157
The Risk of Continued Price Declines
157
Covered Calls for Contingent Sale
159
Picking the Right Conditions for Forced Exercise
159
7
OPTION STRATEGIES IN DOWN MARKETS
161
Thinking Outside the Market Box
162
Remembering the Fundamentals
163
Conservative Versus Speculative: Remembering the Difference
164
The Long Put The Overlooked Option
165
When the Stock's Price Rises
165
When the Stock's Price Falls
168
Short Puts: A Variety of Strategies
169
Conservative Ground Rules for Short Puts
170
Comparing Rates of Return for Dissimilar Strike Prices
172
Three Types of Rescue Strategies
175
Using Calls in Down Markets
176
Calls Used for Leverage, but Not for Speculation
178
Evaluating Your Stock Positions
180
Rescue Strategies and Opportunity
180
Examining the Causes of Price Volatility
181
Contents
Xlii
Deciding When to Sell and Replace Stock
183
Stock Positions and Risk Evaluation
185
The Relationship Between Stock Safety and Options
185
Examining Your Risk Profile
186
Options and Downside Risk
187
The Down-Market Benefits of Options
187
Option Planning with Loss Carryover
190
Timing: Matching Current-Year Profits and Losses
190
8
COMBINATION CONSERVATIVE
TECHNIQUES
193
Spread Techniques
194
Advanced Spread Terminology
196
Straddle Techniques
197
Short Straddles for Conservative Positions and High Rates
of Return
197
Long or Short Positions
198
Mixing the Long and the Short
199
Theory Versus Practice
200
Simplicity as a Worthy Goal
201
Worst-Case Outcome as a Desirable Result
202
Tax Problems with Combination Strategies
203
The Anti-Straddle Rule and Its Effect
203
The Ultimate High-Return Strategy
204
A Review of Your Conservative Assumptions
205
Examples of the Strategy in Practice
206
Pick Your Portfolio
207
Pick Expiration Dates
207
XIV
OPTIONS TRADING FOR THE CONSERVATIVE INVESTOR |
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| id | DE-604.BV035095994 |
| illustrated | Illustrated |
| index_date | 2024-07-02T22:12:16Z |
| indexdate | 2024-07-09T21:22:06Z |
| institution | BVB |
| isbn | 0131497855 |
| language | English |
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| publishDate | 2007 |
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| series2 | Financial Times Prentice Hall books |
| spelling | Thomsett, Michael C. Verfasser aut Options trading for the conservative investor increasing profits without increasing your risk Michael C. Thomsett 5. printing Upper Saddle River, NJ Prentice Hall/Financial Times 2007 xxiii, 255 p. ill. 24 cm txt rdacontent n rdamedia nc rdacarrier Financial Times Prentice Hall books Includes index. Stock options Options (Finance) Investments Risk management Digitalisierung UB Bayreuth application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=016764047&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis |
| spellingShingle | Thomsett, Michael C. Options trading for the conservative investor increasing profits without increasing your risk Stock options Options (Finance) Investments Risk management |
| title | Options trading for the conservative investor increasing profits without increasing your risk |
| title_auth | Options trading for the conservative investor increasing profits without increasing your risk |
| title_exact_search | Options trading for the conservative investor increasing profits without increasing your risk |
| title_exact_search_txtP | Options trading for the conservative investor increasing profits without increasing your risk |
| title_full | Options trading for the conservative investor increasing profits without increasing your risk Michael C. Thomsett |
| title_fullStr | Options trading for the conservative investor increasing profits without increasing your risk Michael C. Thomsett |
| title_full_unstemmed | Options trading for the conservative investor increasing profits without increasing your risk Michael C. Thomsett |
| title_short | Options trading for the conservative investor |
| title_sort | options trading for the conservative investor increasing profits without increasing your risk |
| title_sub | increasing profits without increasing your risk |
| topic | Stock options Options (Finance) Investments Risk management |
| topic_facet | Stock options Options (Finance) Investments Risk management |
| url | http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=016764047&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA |
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