Option Spread Trading: A Comprehensive Guide to Strategies and Tactics

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John Wiley & Sons, Dec 8, 2010 - Business & Economics - 288 pages
A practical guide to unlocking the power of option spreads

When dealing with option spreads your looking to purchase one option in conjunction with the sale of another option. If managed properly, these spreads can provide experienced investors with the potential for large returns without undertaking a great deal of risk.

Option Spread Trading provides a comprehensive, yet easy-to-understand explanation of option spreads, and shows you how to select the best spread strategy for any given market outlook. Along the way, author Russell Rhoads discusses spread strategies that can be used to profit from a strong up or down directional move in a stock, a stagnant market, or a highly volatile market. He also details how you can harness the leverage of options to create a low-risk position that provides the potential for a big profit.

  • All manner of spreads are covered, from calendar and horizontal spreads to vertical and diagonal spreads
  • Highlights how you can monitor and adjust an existing spread position and provides tips on how to exit a spread trade
  • Includes exercises and examples to test and reinforce your knowledge of the concepts presented

Option spread trading has become increasingly popular with active traders and investors. Gain a better understanding of this powerful approach with Option Spread Trading as your guide.

 

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Contents

InAtOut of the Money
5
Option Pricing Calculators
12
Covered Call Using LEAPSR
22
Systematic CashSecured Put
31
Synthetic Positions
37
Synthetic Short Positions
44
CONTENTS
50
TimeRelated Greek
61
Butterfly Spreads
135
Iron Butterfly
142
Short Call Butterfly
149
Condor Spreads
159
Iron Condor
166
Short Condor Spreads
172
Reverse Iron Condor versus Long Strangle
179
Put Ratio Spread
189

Interest RateRelated Greek
67
Short Straddle
81
Strangles
89
Short Strangle Mechanics
98
Bull Spreads
107
Bull Call Spread
114
Bear Spreads
121
Bear Put Spread
127
Backspreads
199
Backspread Comparisons
207
The Stock Repair Strategy
213
Calendar Spreads
219
Combined Calendar Spread
227
Diagonal Spreads
231
About the Author
269
Copyright

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About the author (2010)

RUSSELL RHOADS is an instructor for the Options Institute at the Chicago Board Options Exchange. He conducts about ninety classes a year and, in addition, conducts webinars on behalf of the CBOE and a variety of brokerage firms. Rhoads's twenty-year trading career included positions at a variety of trading firms and hedge funds. His background includes trading and analysis, and he is author of Candlestick Charting For Dummies. Rhoads graduated the University of Memphis with a MS in finance and has a master's certificate in financial engineering from the Illinois Institute of Technology.

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