Option Trader’s Workbook, The

Description

“The one thing readers should understand is that Jeff Augen is truly dedicated to educating traders at all levels. Instead of handing out answers, Jeff wants to make sure they understand the concepts he is teaching. He recognizes the value of being able to apply basic knowledge to new situations. Adapting and building on techniques and strategies has made Jeff Augen successful.”
—Michelle Gebhardt, Executive Editor, Stocks, Futures, and Options magazine

There’s only one way to become a great option trader: practice. This up-to-the-minute workbook gives you all the hands-on practice you need to become a consistently profitable option trader…without risking a dime! Jeff Augen walks you through every type of trade, showing you exactly how to execute maximum-profit strategies and avoid disastrous trading pitfalls. You’ll start with the basics and then build your skills to master today’s most powerful new strategies. Use this book to perfect your option trading instincts–so when real money’s on the line, you’ll win!

Just some of what’s new in this edition:

• Using precisely tuned ratio trades to profit in virtually any environment
• Structuring income-generating trades with well-defined risk profiles
• Capitalizing on trades containing both stocks and options
• Mastering the unique dynamics of CBOE weekly options expiration trades
• Using VIX options to take advantage of unusual volatility arbitrage situations

Preface     xi
Notes     1
Chapter 1: Pricing Basics     3
Chapter 2: Purchasing Puts and Calls     43
Chapter 3: Covered Puts and Calls     91
Chapter 4: Complex Trades–Part 1     125
Chapter 5: Complex Trades–Part 2     173
Chapter 6: Advanced Ratio Trades     219
Chapter 7: Stock and Option Trades     251
Chapter 8: Trading the Weekly Options Expiration     261
Glossary     273
Index     279

Learn options by doing, not by reading or memorizing! Gain hands-on expertise through hundreds of realistic trade simulations.

• With this unique problem/solution workbook, you can get all the practice you need, without risking a dime.
• Problems for beginner, intermediate, and expert traders–all with fully explained solutions.
• Extensive new coverage: weekly options expiration; structuring trades to generate income and control risk; ratio and variance trades, VIX options, and volatility ETFs.

Successful stock options trading requires extensive practice. Most options books offer theory and strategies, but don’t offer the practice needed to prepare for real-world trades, where the wrong split-second decisions can cost you dearly. In The Option Trader’s Workbook: A Problem-Solving Approach, expert trader Jeff Augen covers every key scenario you’ll encounter in modern options trading, guides you through successful trade executions, and shows how to overcome key pitfalls that trip up most traders. You’ll walk through trades designed to profit from changing prices and volatility, time decay, rapid price spikes, and many other factors.

This second edition introduces powerful new techniques, and reflects the long-term impacts of the 2009 crash. New problems include:

·    New CBOE Weekly Options Expiration options, and their unique pricing dynamics.

·    Using collars, covered calls, and covered puts to structure income-generating trades with well-defined risk profiles.

·    Using ratio trading, VIX options, volatility ETFs, and variance trading to generate profits from shifts in volatility.

Each section contains information for beginners, intermediate, and advanced traders, helping you build your skills one trade at a time, no matter how much experience you have–or how little. You’ll find several hundred questions, all designed to mirror real life, and supported with clearly explained solutions.

Jeff Augen, currently a private investor and writer, has spent more than a decade building a unique intellectual property portfolio of databases, algorithms, and associated software for technical analysis of derivatives prices. His work, which includes more than a million lines of computer code, is particularly focused on the identification of subtle anomalies and price distortions.

Successful options trading requires extensive practice. Most options books offer theory and strategies, but don’t offer the practice needed to prepare for real-world trades, where the wrong split-second decisions can cost you dearly. Expert trader Jeff Augen covers every key scenario you’ll encounter in modern options trading, guides you through successful trade executions, and shows how to overcome key pitfalls that trip up most traders. You’ll walk through trades designed to profit from changing prices and volatility, time decay, rapid price spikes, and many other factors.

This second edition introduces powerful new techniques, and reflects the long-term impacts of the 2009 crash. New problems include:

• New CBOE Weekly Options Expiration options, and their unique pricing dynamics.
• Using collars, covered calls, and covered puts to structure income-generating trades with well-defined risk profiles.
• Using ratio trading, VIX options, volatility ETFs, and variance trading to generate profits from shifts in volatility.

Each section contains beginner, intermediate, and advanced sections, helping you build your skills one trade at a time, no matter how much experience you have–or how little. You’ll find several hundred questions, all designed to mirror real life, and supported with clearly explained solutions.

Learn options by doing, not by reading or memorizing! Gain hands-on expertise through hundreds of realistic trade simulations.

• With this unique problem/solution workbook, you can get all the practice you need, without risking a dime.
• Problems for beginner, intermediate, and expert traders–all with fully explained solutions.
• Extensive new coverage: weekly options expiration; structuring trades to generate income and control risk; ratio and variance trades, VIX options, and volatility ETFs.

Additional information