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The Options Edge: An Intuitive Approach to Generating Consistent Profits for the Novice to the Experienced Practitioner

The Options Edge: An Intuitive Approach to Generating Consistent Profits for the Novice to the Experienced Practitioner

Michael C. Khouw, Mark W. Guthner

ISBN: 978-1-119-21245-4 May 2016 360 Pages


Capture the fortune you're losing with every trade by learning to exploit options

The Options Edge + Free Trial shows you how to capture the fortune you lose out on every day. Buying and selling traditional investments often entails instruments with optionality. Sometimes this optionality is explicit, while other times it is hidden. If you're not leveraging these embedded options to their fullest advantage, you're losing money. Most retail investors don't truly understand the nuances involved in successful options trading and instead rely on more comfortable instruments with fewer complex mechanics. If you're interested in optimizing your portfolio, it's time to step out of your comfort zone and learn what you've been missing. This book gives you the background you need to take full advantage of options in this booming market. The companion website features easy to use analytical tools that help investors find the best opportunities so you can start applying these methods right away. Whether or not you ultimately decide to start actively trading options, the concepts discussed will make you a better all-around trader with greater security in your financial affairs.

Most investors buy and sell options every day without ever knowing it. This book relates stories of those who have leveraged options to make fortunes and those who have lost by not understanding the optionality of their financial endeavors. You must know the fundamentals of options, and then learn to recognize hidden options, in order to improve success in all of your investment activities. After taking these steps, you can go on to:

  • Create hidden options at little or no cost
  • Structure your finances to reduce risk and increase wealth
  • Utilize a practical pricing model for smarter investing

The listed options are currently the only growing exchange traded financial product in the developed markets, with a current average volume of 20 million contracts—equivalent to 2 billion shares—per day. Now is the perfect opportunity to fortify your finances, and The Options Edge + Free Trial gives you the understanding and practical tools you need to optimize your portfolio today.

Introduction 1

CHAPTER 1 What Is an Option, and How Do Options Work? 11

CHAPTER 2 Valuing Options with the Black–Scholes–Merton Option-Pricing Model 29

CHAPTER 3 Trading Volatility 65

CHAPTER 4 Are Options Fairly Priced? 97

CHAPTER 5 Fundamental Option Strategies 125

CHAPTER 6 Portfolio Hedging Producing Enhanced Returns 155

CHAPTER 7 Option Strategies for Special Situations 193

CHAPTER 8 Extracting Information from Options Prices 213

CHAPTER 9 Synthetics 235

CHAPTER 10 Home Runs 253

CHAPTER 11 Strike-Outs 277

Notes 305

Glossary 311

References 319

About Online Education and Option Trading Tools 323

About the Free Trial 329

Index 331 Site to enter PIN and receive access to a free trial and subscription discounts to the options analytics services
Errata in Text
Correction pdf is attached here.
ChapterPageDetailsDatePrint Run
23Errata in Text
Please refer the correction pdf attached under downloads.