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How to Price and Trade Options: Identify, Analyze, and Execute the Best Trade Probabilities, + Website

توضیحات

Select and execute the best trades--and reduce risk

Rather than teaching options from a financial perspective, How to Price and Trade Options: Identify, Analyze, and Execute the Best Trade Probabilities goes back to the Nobel Prize-winning Black-Scholes model. Written by well-known options expert Al Sherbin, it looks at the basis for probability theory in option trading and explains how to put the odds in your favor when trading options. Inside, you'll discover how anyone can "operate their own casino" if they know how through proper option strategies. Plus, a supplemental website includes videos that walk you through various probability scenarios, pre-formatted spreadsheets, and code.

All investors should have a portion of their portfolio set aside for option trades. Not only do options provide great opportunities for leveraged plays, they can also help you earn larger profits with a smaller amount of cash outlay. With the help of this book, traders, active investors, and self-directed investors of all stripes will learn how simple it can be to deploy probability-based trading strategies.

  • Teaches both defined and undefined risk strategies
  • Utilizes simple cost basis reduction strategies to enhance investment returns
  • Draws on unique research studies
  • Discusses volatility to include both historical (realized) and implied volatility: the interplay between the two is a key piece of information overlooked by option traders

If you're a trader of any level and want to make the best trades possible, this book has you covered.

Introduction

Chapter 1: Why Trade Options?

Strategic Without Being Directional

A Word about Leverage

Options Are a Decaying Asset

Insurer or Insured?

Probability of Making Money

Market Efficiency

Tired, Worn out Metaphors

Chapter 2: What to Look For In a Broker

Brokerages versus Banks

Depth of a Broker’s Pockets

Trading Risk Management

Learning from Recent Events

Account Types

Commissions

Interest Rates

Stock Borrow and Loan

Trading Platforms

Conclusion

Chapter 3: Building the Foundation

Options Pricing Models

Option Pricing Model Inputs

Historical Data as Input into the Implied Volatility of an Underlying

Implied Volatility as a Predictor of Stock Movement and Probabilities

The Distribution Curve

Breakout Stocks

Actual versus Historical Distribution Curves

Chapter 4: Trade Probabilities: What to Look For

The Results

How to Calculate Option Probabilities

Chapter 5: Choosing Your Trades

Choosing Your Underlying

Making an Assumption

Chapter 6: Choosing a Strategy

Defined Risk Trades

Credit Spreads

Debit Spreads

Butterfly

Iron Condor

Calendar Spreads

Undefined Risk Trades

The Straddle

The Strangle

Short Naked Puts

Ratio Spreads and Back Spreads

What Time to Expiration Should My Trades Have?

Trading Earnings Announcements

Chapter 7: Exiting Trades

The Variables

The Kelly Criterion

Morning Routine

To Log Your Trades or Not to Log Your Trades

Chapter 8: Executing Your Trades

Order Types

Chapter 9: Portfolio Management

Two Types of Risk

The Goal: Diversification – Minimizing Unique Risk

The Methods: Correlation and Number of Positions

Identifying and Mitigating Systematic Risk

Trade Sizing

Early Exercise

Conclusion

About the Website

About the Author

Index

 

 

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