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- Herausgeber: Joseph Williams
- Kategorie: Fachliteratur
- Sprache: Englisch
- Veröffentlichungsjahr: 2020
Are you interested in making money from Options trading, but don’t know how?
Want to know how to trade Options profitably risking minimal amount and not losing your capital?
You want a book that will teach you step-by-step various options trading strategies and how to make a profit for a living using options trading? This is the right book for you!
This book will teach you the basic concepts of options trading, how to make money in Options trading applying various options trading strategies, minimize losses, tips and strategies to reduce risk and trade profitably.
I am an Option Trader with over 8 years’ experience. I started with stocks trading before I move on to trade options. After wasting much hard-earned money on courses and various books with no tangible result, I learnt to trade Options the hard way. My experience taught me that not all strategies are ideal for beginners, master one strategy, profit with it before adding another strategy, major on minor and focus on the real deal. These and many more are some of my personal experience which I will be taking you through in this book.
Moreover, in this book you will learn:
- All about the basics of Options Trading
- Master the most widely used Options Strategies that guarantees consistent profit
- How to manage Risk and diversify your portfolio
- How to trade with a plan and have the right mindset for trading
- Step-by-step methods that get you started trading.
- Lots of tips and strategies to make money from options trading
- Learn how to make money from options trading
- Interested in investing in stock options
- Learn how to profitably trade the market using option strategies
- Make side income trading Options
Scroll up now, click the BUY NOW button and download your copy right away!
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OPTIONS TRADING FOR BEGINNERS:
A Complete Step-By-Step Trading Guide To Profit In Options Trading
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Joseph Williams
LEGAL NOTICES
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COPYRIGHT
All rights reserved. No part of this book may be reproduced in any form whatsoever, electronic or mechanical, including photocopying, recording, or by any informational storage or retrieval system or re-distributed without the express written permission of the author. This book cannot be sold under any circumstance; you have only personal rights to this book.
DISCLAIMER
By using the information in this book you agree that this is general education material and you will not hold anybody responsible for loss or damages resulting from the content provided here by the author
Please note that Options trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors. Before undertaking any such transactions you should ensure that you fully understand the risks involved and seek independent advice if necessary. Any opinions, or other information contained in this book are provided for general educative purpose, and do not constitute investment advice.
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Copyright © 2020 Joseph Williams
All rights reserved.
Table of Contents
Introduction
Chapter 1
Getting Started
Brief History of Options Trading
What are Options?
Option Pricing
Option Types
Call and Put Option Explained
How to Read Options Table
Buying and Selling Call and Put Options
How to Buy Call Options
How to Buy Put Options
Expiration Cycles
Expiration Dates
Chapter 2
Trading Terminologies
Chapter 3
How to Analyze and Trade Options
Fundamental Analysis
Quantitative and Qualitative Analysis
Technical Analysis
The Significance of Trends in Option Trading
Chapter 4
What Is An Option Chain?
Various Types of Options Chains
Chapter 5
Option Trading Strategies
Long Calls
Short Calls
Short Stock Options Strategy
Long Put
Short Put
Covered Call
Married Put
Bull Call Spread
Bear Put Spread
Protective Collar
Butterfly Spread
Iron Condor
Iron Butterfly
Naked call
Put Credit Spread
Put Debit Spread
Call Debit Spread
Call Credit Spread
Long Straddle
Short Straddle
Long Strangle
Chapter 6
How To Trade Volatility
How to Trade Implied Volatility
Chapter 7
Choosing A Broker
Finding the Right Options Broker
Reviews of Major Brokerage Platform
Chapter 8
Placing Your First Trade
Placing the First Trade
How to Place the Your Order
Managing Option Positions
Chapter 9
Money Management
Position Sizing
Risk and Reward
How to Maintain the Right Mindset
Chapter 10
How to Manage Your Risk
Easy Ways to Reduce Your Risks
Conclusion
Introduction
Options trading is not about long-term investing or even something like swing trading over the course of months.
This guidebook focuses on options trading and how it will work. We will start with some of the basics that come with options, such as how they work and what they are all about and the benefits of trading these rather than working with some other investment types. We will then move on to some of the best strategies that you can go with when trading options, and how you can pick a good strategy that will help you to earn a profit, no matter how the market is doing. Then we move on to discuss a lot of information on how to reduce your risks and some tips that will increase your chances of being successful in this market.
The aim of this book is to explain the main concepts of options trading and how it works, and various strategies to help you make money in the market and definitely you will make profit. You will need to start by considering which type of underlying asset you are going to want to pursue, if stock market options don’t sound that appealing to you. With this out of the way, you will then need to consider the current state of the market in question and how you can craft a plan to take advantage of those specifics.
It is my sincere hope that this book helps you gain all the knowledge you need to get started with options trading and trade profitably, so let’s begin without further ado.
Chapter 1
Getting Started
Brief History of Options Trading
Trading Options dated back to 332BC, when a man known as Thales bought the right to purchase olive before harvesting, reaping a fortune. Options then reappeared during the 1636 tulip mania, where tulip options were commonly bought to gamble on the rising tulip quality. In London, at the end of the seventeenth century, a market was developed to deal with both call and put options.
This was the first case of both call selling and putting calls on an exchange. By 1872, Russel Sage launched the unstandardized and illiquid US over the Counter call and put options market. The introduction of options trading as we know it today came with the formation of the Chicago Board Options Exchange (CBOE) and Options Clearing Corporation (OCC) in 1973, where structured listed exchange call options were launched. By 1977, the CBOE has launched put options, and since then, the stock market has taken on the structured traded form of exchange that we are familiar with today.
What are Options?
Options are an attractive investment tool. They have a risk/reward framework, which is unlike any other. They can be used in a multitude of combinations that make them very versatile. The risk factor involved can be diluted by using these options with other financial instruments or other option contracts, and at the same time, opening more avenues for profits. While many investments have an unbound quantum of risk attached, options’ trading, on the other hand, has defined risks, which the buyers know about. At no point will the buyer lose more than the option's price, the premium, as the right to sell or buy the underlying asset at a particular price expires on a given date. But an uncovered option seller may be presented with a very significant amount of risk.
Options are derivatives, the prices of which are linked to an underlying asset or security. To present stock options more formally, it is a contract between two parties in which the option holder (buyer) purchases the right (while not being bound) to sell/buy the shares of an underlying stock at a predetermined price to/from the option writer (seller) within a particular period.
In simpler words, for people who are not interested in investing in stocks to a great extent, options exist. It is an agreement between two parties to buy or sell the rights to an underlying stock. For instance, a person purchases an option and pays a premium to the seller, hoping/speculating that the stock price may increase before the agreement's expiration.
Options provide you the opportunity to implement a multitude of strategies with limited or unlimited risk. The potential for limited or unlimited profit can also be created by practicing these strategies. Hedging and other speculative can also be done.
Option Pricing
In the world of finance and stock trading, the price of an option is termed as premium. No matter what happens to the underlying security involved, the buyer can never lose more than his or her initial premium. So, the buyer's risk is always limited to the amount paid for the option. But as far as the profit potential is considered, it is unlimited at least theoretically.
The seller of the options often assumes to have a risk to deliver (in case of a call option) or taking a delivery (in case of a put option) of the stock shares in return for the premium that is received from the buyer. The loss of the seller can be open-ended; that is, the seller can even lose much more than the premium he has received until and unless that option is covered by any other option or a position in the underlying stock.
Option Types
There are two basic styles of options: the American and the European style. Any trader on a beginner’s level should always be aware of the two.
The American style of options trading is generally exercised between the expiration date and the purchase date. Exchange-traded options are mostly traded in the American way, and so are all the stock options, whereas all European style option can only be traded on the day of expiry. Index options are generally traded in the European way.
There are another two terms that every beginner should be associated with, out of money and in the money. The current price of any stock plays the deciding factor here. In the case of a call option, when the strike price of the option is more than the current price, it is said that the call is out of money. And when the strike price stays below the current stock price, it is said that the call is in the money. But in the case of put options, it is just the opposite. Here, when the strike price is above the current price, the put is in the money. Similarly, when that strike price is below the current price, the put is out of money.
The expiration date is the date when a stock gets expired. Every option has an expiry date of its own. In case of normally listed options, this expiry date can be up to nine months from the date they were first listed. There is another term called leaps, referred to as the option contracts with longer terms. These can even have expiration dates up to two or three years from the listing date.
The official expiration day of an option is the Saturday after the third Friday of the expiration month. But the third Friday is generally considered the expiration day as most of the broker becomes unavailable during the Saturdays and the exchanges get closed on Saturdays. The Saturdays are usually taken to settle the broker to broker deals.
Stocks usually have a three day settlement period. But in the case of options trading, it is settled the next day. So to settle on the date of expiry, the traders will have to trade the options by the end of Friday.
