Advanced Option Strategies » Options

Option Trading: Thinking Outside the Box! Intermediate To Advanced Futures Options Strategies! A+ [Kindle Edition]

admin — Tue, 10 Aug 2010 16:42:12 +0000

“Who Else Wants To Put Themselves Through An Exclusive, Top Secret Training Program, Developed By An Ex-Trader From One Of The World’s Largest Grain Trading Companies That Can Instantly Transform Your Commodity Option Trades Into Pure Gold, While Minimizing Risks And Losses To The Lowest Possible Level?” There are many futures options techniques that can be profitable. They can range from buying and selling options based on volatility to trading ratiobackspreads based on the technical analysis of the underlying futures market.One way is to trade spreads that can profit from time decay. You can sell options which you believe will lose more time value than the options you buy.The key is to find techniques that have an advantage when you put the trade on. What I will discuss are futures options trades that have this advantage.Trades that have a special quality that you can spot before you enter into it. You will be able to see what options are cheaper or more expensive co (more…)

Understanding Options [Paperback]

admin — Sun, 01 Aug 2010 20:51:22 +0000

Written by Michael Sincere, the best-selling author of Understanding Stocks and other popular investing books, this down-to-earth guide employs short, concise chapters to explain what options are, the various types of options, how to trade options, how to avoid investing mistakes, beginning and advanced options strategies, and much more. Understanding Options tells you in jargon-free language how options are income-producing tools; how options can be part of an overall investing plan; the relationship between options and stocks; the pros and cons of options, how personal computers have made options easier than ever to understand and use; and much more.

From the Back Cover

“Mike Sincere has been able to take a very complex subject, option trading, and detail it into an understandable book that may become the model for textbooks for teaching the basics. The flow of the book makes all readers eager to learn more and to approach options with an un (more…)

Understanding Advanced Option Strategies – A Simplified Guide to Trading Stock Options [Kindle Edition]

admin — Thu, 29 Jul 2010 11:11:58 +0000

Go beyond the basics, and learn about Advanced Option Trading Strategies. Learn about Call and Put Spreads, Option Straddles, and Option Strangles with Option Maestro’s Advanced Option Trading Strategies E-Book. Learn easily with step-by-step examples. 100% Money Back Guarantee!

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Mastering Advanced Options Strategies [Spiral-bound]

admin — Sat, 17 Jul 2010 13:31:16 +0000

No description for this product could be found, but have a look over at Amazon for reviews and other information.

Advanced Options Trading: The Analysis and Evaluation of Trading Strategies Hedging Tactics and Pricing Models [Hardcover]

admin — Sat, 19 Jun 2010 10:15:26 +0000

This book thoroughly explains the options markets. Moreover, the work contains several unique features, including computer codes to calculate changes in options properties and a historic evaluation of options strategies and pricing theories. As a result, traders learn what works and what doesn’t work. Specific features include: Exotic options; The factors influencing option pricing; Advanced trading strategies such as spreads and straddles; The importance of delta, gamma and theta; Risk management with options.

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Stock Market Trading – Top 4 Trading Myths That Jeopardize Your Success

admin — Sat, 16 Jan 2010 19:21:56 +0000

Do you believe buy & hold is safe? Or that selling short is risky? Read below the top 4 myths that are widely believed, and keeping people from their trading potential. When you properly understand these myths, you will be leaps ahead of everyone else.Myth #1 Selling Short Is RiskyThis trading myth comes from the fact that some stocks can trade down to zero while there is no limit to how high that stock can trade. So losses for long positions are limited on the downside, but short positions can suffer unlimited losses.But the belief that short selling is risky is preventing you from minimizing risk and preventing you making money. You see, selling short works just as well as buying long if done properly. The level of a positions risk depends on good money management methods.A small percentage of traders have realized this and have developed a trading strategy to sell short and profit easily regardless of which way the stock market is moving.Myth #2 Buying & Holding is SafeThis would have to be the most common trading myth, that stems from the belief that the stock market always goes up in the long run. This is true enough, but it can also take an extremely long time. Some markets have been known to drop dramatically, and not return for 25 years! Like the Dow Jones Industrial Average from 1929 to 1954.It dropped so low during this time that no one would sit through it. Money managers who can duplicate the performance of the general market are very rare. You need an exit strategy that limits risk for every strategy, whether investor or trader.A small percentage of traders are using a trading method that will actually apply to any market. This potentially gives them a winning edge. They aren’t simply buying, holding, and hoping like most traders do.Myth #3 Trading is easyIf making money consistently from the stock market was easy, everyone would be doing it, and all be wealthy from it. Yeah, the physical part is easy enough, but many people have this idea that trading is easy, but they were never given the tools that make it easy. It’s not that trading needs to be difficult, but it requires a solid trading method, and diligence on the traders part to stick with it. And unless you also trade with discipline and use good money management principals like the most successful traders, you can only hope to be less than successful.Myth #4 The existence of the Holy GrailI see far too many traders hopping from method to method, pursuing the next guaranteed thing only to be repeatedly let down. Newbies tend to think they should be able to win practically every trade. Thinking they should be having a straight line of wins without any major setbacks. When armatures try something, they conclude that their system doesn’t work after the first few losses in a row. So they jump on something else. How can anyone expect to succeed this way. Unless you want to continue to suffer losing trades, and eventually give up, stop chasing this holy grail nonsense.The holy grail of trading doesn’t exist. It would seem more than 90% of traders are wasting years of their life with this myth. Think of the progress, the money that could have been made, if they had spent that time and energy on a solid trading system, and a good trading method.

Where to go from here:Well first, simply understand and clear your head of the above stock, and trading myths. Free yourself from these beliefs that restrain your potential as a trader. This will automatically put you in front of most traders.There are a few traders however, less than 1%, who understand the above and more. who are quietly making a killing from the stock market, and are spending no more time trading than you. A lot of them keep their winning system and their successful trading secrets to themselves, but there are a few who will share this information with the publicJust remember, none of these super traders are born geniuses. And they don’t have a crystal ball forecasting the stock market. They simply have found a winning system that isn’t restricted to any time frame or market. The most successful traders are nobody special, apart from the stock market secrets they learned and diligence to put them in action.Regardless of whether you trade Stocks, Options, Futures or Forex, or your level of experience, you can’t afford to keep buying and hoping. Stop leaving your success to chance when you can take control. It isn’t necessary to keep wasting all this time and money on the common trading methods. Even if you are ahead, the average trader could trade far more efficiently.You too can become one of the very small percent of traders. Seriously, you just need to learn how to properly, plot the chart, the right setup conditions, the best entry point, stop loss point, and place your profit target point. To learn how to do the things listed above, and for actual insider trading secrets on how the most profitable traders really do it – Read on.

Option Trading: Thinking Outside the Box! Intermediate To Advanced Futures Options Strategies! A+ (Kindle Edition)

admin — Thu, 14 Jan 2010 22:25:29 +0000

Maximizing Option Trading Profits With Fast Puts And Calls

admin — Thu, 14 Jan 2010 07:27:45 +0000

In today’s chaotic stock market, the ability to make a profit trading long Option positions (Puts and Calls) depends on being able to capitalize on short-term moves in the price of a stock or index. Stocks are up one day, and down the next – and it’s anybody’s guess as to what the long-term outlook is. With the price action occurring on a daily basis being more or less a guessing game, the ability to make profits with long option positions depends on being able to buy options that can gain value quickly with a minimum amount of price movement in the underlying security.
In the past, figuring out which option might move the most quickly has been a guessing game. For every equity with options there are several options for each expiration month. In the case of options on Indices, such as SPY or DIA, there are literally dozens of option choices for each month. Clearly, figuring our which of those options will reach a particular target gain on your initial investment, just by looking at the list of choices, is basically a guessing game
The key to a winning Option Trading Strategy it to be able to sort out the relative behavior of all of those options, and find the ones that can make your target investment gain (50%, 100%, etc.) with the least amount of price movement in the stock. The availability of a new Spreadsheet that can analyze and display the behavior of the various option choices, and show clearly which options can provide the desired gains with the least amount of price movement in the stock, eliminates the guesswork.
This analytical spreadsheet provides a number of useful Metrics for characterizing the behavior and future value of options, but the most important are the price gain data in the Matrix displays, which give a visual impression of the rate at which the different options will gain value as the price of the stock or Index changes. This provides the tool for finding the options which gain value at the fastest rate.
The spreadsheet provides two Matrix displays: The first shows the behavior of the options based entirely on the effects of Delta and Gamma, which determine how the price of the options change as the Stock price changes. This set of calculations is most relevant when you expect a very quick move in the stock price – a situation in which time decay (Theta) does not play a significant role. The second Matrix adds to the Delta and Gamma effects calculations of the influence of both Time Decay, and Volatility (Vega). These two variables can be changed independently of each other.
The results of these calculations are illustrated below in two tables. The data in the tables are for Dollar Tree Calls. The first set of values shows the amount that each call will gain based on the increase in the value of DLTR stock shown in the top line of the table (DLTR Price Gain). To make the relative behavior of the different Options clear, each line of the Table shows only the two price gains which bracket the increase in the option Bid price that will allow each option to be sold for double the original price paid, (the Ask price). (The target value can be set to any desired multiple of the initial cost, not just 2x, as in this example):
DLTR @ $35.42, Price changes needed to Double the value of a Call:
Matrix 1 – Delta & Gamma only price gains:
DLTR Price Gain:___ $2.00__$3.00__$4.00__$5.00__$6.00__$7.00__$8.00
DQO CU_______________$1.48___$2.09
DQO CH_______________$1.09___$1.56
DQO CV_________$0.47__$0.76
DQO CI_________$0.31__$0.51
- – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – -
DQO EH_______________________$1.89___$2.45
DQO EV_______________________$1.56___$2.04
DQO EI________________$0.91___$1.28
DQO EW_______________$0.73___$1.03
(These tables are greatly abridged for publication, and many data columns are not shown.)
The second Matrix shows how these same options will behave at some time in the future and, optionally, with a change from the present value of Volatility (Vega). The number of days into the future, and the change in Volatility, are determined by user input, which allows the exploration of many different “what if?” scenarios:
Matrix 2 – Price Gains after 35 Days and with Volatility at 85% of current value:
DLTR Price Gain:____$2.00__$3.00__$4.00___$5.00___$6.00___$7.00__$8.00
DQO CU__________________* * *___* * *__$1.65___$2.53
DQO CH__________________* * *___* * *__$0.52___$1.28
DQO CV__________* * *____* * *__________________$0.43__$0.76
DQO C___________* * *____* * *__________________$0.18__$0.37
- – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – -
DQO EH_________________________* * *____ * * *___$1.58___$2.30
DQO EV_________________________* * *____* * *__________$1.50___$2.15
DQO EI___________________* * *___* * *__________$0.66___$1.06
DQO EW_________________ * * * ___* * *__________________$0.72___$1.06
In this second Matrix, the positions occupied by price gain data appearing in Matrix One are represented with asterisks (if they differ from the new positions), providing a clear visualization of the way in which the Options’ gains in value have been changed by the effects of Time and Volatility.
The Tables above show how an analysis of multiple options can be used to make choosing the fastest option to purchase for a trade a more systematic process. If we anticipate that DLTR is going to make a quick move upward in price over the next couple of days (perhaps because of an earnings announcement), then using the data from the top table we would buy either the DQO CV Calls, or the DQO CI Calls. In cases like this, where there are two choices for an option based on the fastest rate of price gain, there are other metrics, such as price gain to achieve break-even, which can be used to narrow the choice further.
Based on the results of the analysis, these two Calls should double in value if the price of DLTR stock rises by $2.00 – $3.00 over the next few days, as of the time this data was current (early February 2009). The DQO CU and DQO CH options, by contrast, won’t double unless the price of DLTR rises by $3.00 – $4.00. If we were expecting the stock to drop, then we would perform a similar analysis using the Puts for DLTR. This example illustrates the power of this strategy: Buying one of the two fastest options cold result in a 100% profit, after the price of the stock has risen by less than 9%!
On the other hand, if we expect that DLTR will rise gradually over the next several weeks, then we would use the calculations in the second Matrix. Setting the number of days to the expected interval for the trade (in this case, 35 days) and allowing for the likelihood of a 15% decrease in volatility for these options, the best choices for Call options to buy would then be either the DQO CU, or the DQO CH Calls. Note that these March calls will still provide a faster return than the longer expiration options (the the May calls), even though the elapsed time is 35 days. This is not always the case, however.
One of the advantages of the way this data is presented is that anomalies in Option pricing “jump out” at the user very clearly. In the second Matrix, notice that the price gain data for the DQO EI Calls are displaced one position to the left, relative to the DQO EW and DQO EV Calls. This indicates that the DQO EI calls have an advantage over the others under these conditions, and will produce a faster return.
The use of a trading strategy that takes advantage of analytical tools (like the price gain velocity analysis shown here) provides an opportunity to make trading decisions that are based on analytical data, rather than “gut instincts”. This provides Option Traders with a more systematic way to make choices when devising an Option trading strategy, and taking an Option position.

Advanced Options Trading: Approaches, Tools, and Techniques for Professionals Traders (Hardcover)

admin — Mon, 11 Jan 2010 18:19:45 +0000

As an active trader in today’s market, you are faced with unprecedented challenges. Dramatic price swings in equity, debt, and currency have made it tougher than ever to manage and trade risk. But with great risk, of course, comes great opportunity— and Advanced Options Trading delivers a detailed system for successfully trading options in a highly volatile and unpredictable global market. Noted options educator and owner of his own brokerage house, Kevin M. Kraus explains the best practices for using options to capture premium, reduce equity purchase prices, manage the costs of buying options, and control portfolio risk—critical skills for finding steady profits in our ever-shifting economic landscape. He offers a close examination of the nature of volatility and what it means for investors, whether they’re just getting started or are veterans of the options market. Advanced Options Trading covers:T (more…)

Trading Stock For Dummies

admin — Mon, 11 Jan 2010 07:17:22 +0000

Over the last year the current bear market that is taking place in stocks has left many stock traders facing relentless selling. For the beginner this experience has been made worse by not having the knowledge as to how the markets work and what they can do to protect themselves during the challenging economic times. While many are discouraged by this, the fact of the matter is that you can be able to protect yourself from the volatile market conditions and at the same time take advantage of the price irregularities that the markets will present the prudent stock trader with during the bear markets. This means using tactics that many beginning traders simply don’t know about or don’t understand such as:

Always use a sell stop: A sell stop is a sell order that is placed in advance, what happens is if the price of the stock hits a particular price which you determine in advance then it becomes a market order and you are out of the stock. The idea is to use this to protect you against buying something at high and then ridding it all the way down to the low. The biggest advantage that this has is you can set the sell stop at a particular point which could be a sign that the stock could be getting ready to go lower such as right below support (which is a major point that the stock stopped dropping previously and then reversed going higher). You can also adjust the sell stop upward to protect your profits and then when the stock does start to top out and go lower the sell stop will sell the stock leaving you in cash while it is going down, something that will help improve trading stock for dummies.

Buy after you see the follow through of a trend: A trend is when you see three consecutive points confirmed. What happens is many investors try to guess when the economy is going to turn around or if a company is going to beat their earnings based on what is happening in one quarter often leading to losses as they were just a little to early to get into the stock. What you want to do is see three consecutive quarters of better than expected numbers from a stock to confirm that they are in an earnings growth trend. When you are looking at any economic numbers you want to see three consecutive numbers in the same direction to confirm that a particular sector of the economy is expanding or contracting.

Clearly trading the markets during these challenging times can be very confusing for the beginning trader. To be able to successfully trade the volatile markets means that you must use tactics that will protect you as well as let you enter the stock at the right time such as: always use a sell stop and buy after you see the follow through of a trend will help you avoid the falling knifes, increasing your overall profits, helping you to be more successful at trading stock for dummies.