AARP Getting Started in Options

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John Wiley & Sons, Dec 19, 2011 - Business & Economics - 416 pages
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During the recent market turmoil, option trading volume actually increased, but many are still unsure of the opportunities that options present, simply because they don't fully understand how this market works. With Getting Started in Options, Eighth Edition, author Michael C. Thomsett looks to change this. In non-technical, easy-to-follow terms, this accessible guide thoroughly demystifies the options markets, distinguishes the imagined risks from the real ones, and arms investors with the facts they need to make more informed decisions.

  • Opens with an introduction commenting on the recent market turmoil and the growing importance of options
  • Contains new chapters on futures and index options
  • Includes sidebar definitions and easy-to-follow examples that anyone can understand

Besides new examples, updated charts, and timely additions to reflect important changes in the markets, this edition also includes discussions on other important options issues, such as: how to calculate options returns; "test run" activities to try out new theories; and much more.

 

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Amazingly shameless AARP publication - touting the very, very risky practice of options trading to its membership! AARP would better serve its membership with an editorial or publication policy that is better suited to retirement planning.

Contents

The Call Option
The Put Option
Option Valuation
A Note on the Expiration Cycle
Using the Daily Options Listings
Understanding Option Abbreviations
Understanding the Limited Life of the Call
Judging the Call
Straddle Strategies
Theory and Practice of Combined Techniques
The Case for Paper Trading
Two Sites Worth Checking
Proceeding with a PaperTrading Plan
SwingTrading Basics
The Setup Signal
Testing the Theory

Call Buying Strategies
Defining Profit Zones
The Limited Life of the Put
Judging the Put
Put Buying Strategies
Selling Uncovered Calls
Selling Covered Calls
Calculating Rate of Return
Timing the Decision
Avoiding Exercise
Analyzing Stock Values
Evaluating Risks
Put Strategies
Developing an Action Plan
Selecting Stocks for Call Writing
Averaging Your Cost
Analyzing Stocks
Applying Analysis to Callsthe Greeks
Acting on Good Information
Avoiding 10 Common Mistakes
Modifying Your Risk Tolerance
The Nature of Market Volatility
Market Volatility Risk
Options in the Volatile Environment
Overview of Advanced Strategies
Vertical Spread Strategies
Horizontal and Diagonal Spread Strategies
Altering Spread Patterns
Hedge Strategies
A Strategic View of Options for Swing Trading
Options Used for Other Trading Strategies
Swing and DayTrading Advanced Strategies
Important Distinctions
Regulatory Differences
Advantages to Trading Index Options
Exercise and Expiration Rules
Index Option Strategies
Structured Index Options
Identifying the Range of Risk
Tax Consequence Risk
Evaluating Your Risk Tolerance
Tax Ramifications in Trading Options
Qualified Covered CallsSpecial Rules
Looking to the Future
Finding a Realistic Method
Annualizing Models and Guidelines
An Overview of Basic Calculation for Calls
Anticipating the Likely Return
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