Understanding Options


Understanding Options is an investing classic with new facts, charts, and strategies to help you beat today’s tough markets. It provides all the basics you need to get started in the increasingly popular options market. Important new material includes overcoming assignment anxiety, LEAPS, the Greeks, protective and married puts, the collar, credit and debit spreads, straddles, the strangle, and options tips. Through this book, you'll learn what options are and how they work, their pros and cons, their relationship with stocks, and how to use them to gain leverage, generate extra income, and protect against adverse price movements.

This go-to guide has brand new information and features, including:

  • Updated facts, charts, and figures

  • Expanded coverage of collars, credit and debit spreads,

  • mini-options, the Greeks, and protective puts

  • Key strategy insights from master options traders

  • A critical look at trading options on ETFs

Table of Contents

Chapter Opening

Part One

  1. Welcome to the Options Market

  2. How to Open an Options Account

  3. The Fascinating Characteristics of Options

Part Two

  1. The Joy of Selling (Writing) Covered Calls

  2. How to Choose the Right Covered Call

  3. Step-by-Step: Selling Covered Calls

  4. Managing Your Covered Call Position

  5. Assignment: Your Obligation to Sell

Part Three

  1. Introduction to Call Strategies

  2. How to Choose the Right Call Option

  3. Volatility and Options Pricing

  4. Step-by-Step: Buying Calls

  5. Managing Your Call Position

  6. Exercise: Your Right to Buy

Part Four

  1. How to Choose the Right Put Option

  2. Managing Your Put Position

  3. Protective and Married Puts

  4. The Collar

Part Five

  1. Credit and Debit Spreads

  2. Buying Straddles and Strangles

  3. Selling Cash-Secured and Naked Puts

  4. Delta and the Other Greeks

  5. Trading Options with ETFs, Indexes, Weeklys, and Mini-options

  6. Advanced Strategies

Part Six

  1. Sheldon Natenberg: Professional Options Trader

  2. Where to Get Help

  3. Lessons I Learned About Options



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