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Spread Trading: An Introduction to Trading Options in Nine Simple Steps



Spread Trading: An Introduction to Trading Options in Nine Simple Steps

Greg Jensen

ISBN: 978-0-470-48617-7 May 2009 352 Pages


A proven,easy-to-understandmethod for makingmoney with options

"If you've never invested in the stock market,this is the book for you. If you've been investingfor years . . . this is still the book for you. A fantastic introduction to options."
Jon "DOCTOR J" Najarian, Co-founder,

Spread trading-the practice of combining optiontrades and adjusting them over time-is being used successfullyby more and more professional traders. In this book, Greg Jensenshows nonprofessionals the tremendous advantages thissafe and profitable method offers.

In simple and precise terms, Spread Trading providesreaders with all the essential tools to begin trading options.It explains, in nine simple steps, the basics of puts, calls,strike prices, and spreads-assuming no prior knowledge onyour part-and tells how to profit no matter what the market does.The author has helped thousands of people achieve successimplementing this approach, and with Spread Trading, hecontinues to educate individuals on the benefits of trading thisway, showing you how to make money while reducing risk.

Building his lessons around the entertaining story oftwo ordinary guys figuring out how to trade options with each other,Jensen offers more than dry formulas-he relates the sense andthe intuition of trading options in a way that is simple,methodical, and easy to follow.


About the Author.


STEP ONE Understanding the Long and Short of "Call" Options in the Market.

CHAPTER 1 Lon and Shorty.

CHAPTER 2 Let’s Make a Deal.

CHAPTER 3 Trading Rights and Obligations.

CHAPTER 4 Some Key Terms . . . that Almost Make Sense!

CHAPTER 5 Strike One . . . .

CHAPTER 6 Strike Two . . . .

CHAPTER 7 Time Travel.

CHAPTER 8 R&R and Time Travel for Lon.

CHAPTER 9 R&R and Time Travel for Shorty.

CHAPTER 10 How Lon and Shorty Came Out on Their Deal.

STEP TWO Understanding the Long and Short of ‘‘Put’’ Options in the Market.

CHAPTER 11 Bulls, Bears, and Stags.

CHAPTER 12 The Put: Reaching a Different Trade of Rights and Obligations.

CHAPTER 13 Strike One . . . .

CHAPTER 14 Strike Two and Time Travel.

CHAPTER 15 R&R for Lon.

CHAPTER 16 R&R for Shorty.

CHAPTER 17 The Big Picture . . . So Far.

CHAPTER 18 How Lon and Shorty Came Out on Their Deal.

STEP THREE Ramping Up the Possibilities.

CHAPTER 19 Did You Know that There Are a Lot of People Trading Options?

CHAPTER 20 Did You Know You Can Actually Buy and Sell Your Options to Other People ?

CHAPTER 21 Did You Know You Can Vastly Increase Your Return on Investment?

CHAPTER 22 Did You Know that You Never Want to "Make As Much Money As Possible"?

CHAPTER 23 Best of All: Did You Know You Can Combine Option Instruments?

STEP FOUR Getting a Few Basics in Place.

CHAPTER 24 More Time Travel.

CHAPTER 25 What Is an Option Worth?

CHAPTER 26 Strike Three.

CHAPTER 27 Choosing Stocks.

CHAPTER 28 Reading the Tea Leaves (1).

CHAPTER 29 Reading the Tea Leaves (2): Stock Trends.

CHAPTER 30 Getting the Final Pieces in Place.

CHAPTER 31 Fun, Fun, Fun!

STEP FIVE Understanding Two Basic Option Trades.

CHAPTER 32 Insuring Your Investment.

CHAPTER 33 Shorty Heaven: Selling Your Way to Profits.

STEP SIX Moving from Option Trading to Spread Trading.

CHAPTER 34 Trading in Surround Sound: The Fundamental Spread Trade.

CHAPTER 35 The Two Basic Ways to Make Money in Spread Trading.

STEP SEVEN Understanding Bullish Spread Trades.

CHAPTER 36 The Bull Call.

CHAPTER 37 The Bull Put.

CHAPTER 38 Bull vs. Bull.

STEP EIGHT Understanding Bearish Spread Trades.

CHAPTER 39 The Bear Call.

CHAPTER 40 The Bear Put.

CHAPTER 41 Bear vs. Bear.

STEP NINE Getting Started.

CHAPTER 42 Lifting the Fog.

CHAPTER 43 The Launch.

APPENDIX Answers to End-of-Chapter Reviews.