How to Trade, Put, and Call Options: The New and Proven Way to Stock Market Profits

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Lawrence R Rosen, 1974 - Options (Finance) - 141 pages
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Under normal circumstances when one buys a stock, the investor makes no profit in two out of three possible occurrences - (1) when the price of the stock goes down; (2) when the price of the stock remains the same.
The investor only profits if the stock increases in price.
However, selling options on stock owned or purchased makes it possible for the investor to ear handsome annual rates of return, frequently 40% or more!
Unlike regular stock purchases where a profit is possible only if the price of the stock increases, options make it possible to make a profit even if the stock remains at the purchase price or if it increases in price.
For more venturesome investors, annualized rates of return of 100% or more are possible under bearish market conditions by selling "naked options" (without actually buying or short selling any stock). In this instance the investor can realize a profit if the price of the stock remains the same or declines.
The author covers the risks as well as the rewards of trading in options.
 

Selected pages

Contents

Instant Profits Buying a Stock and Writing a Call
1
Treatment of Dividends and Distributions
9
The Call Option Contract
11
Option Writing for the LockedIn Investor
15
Why Buyers Buy Calls
19
Federal Income Tax Consequences to the Seller and Buyer of a Call Option
25
Margin Accounts and Their Role in Selling Calls
31
Selling a Call against a Holding of Convertible Bonds
45
Option Premiums
71
Chicago Board Options Exchange CBOE
77
An Option Account in Operation
97
Puts
109
Straddles Spreads Strips Straps Special Options and Conversions
123
Conclusion
135
Regulatory and Legal Matters
137
Index
139

Record Keeping
51
Stock Market Strategy and Call Options
67

Common terms and phrases

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