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Trading Options For Dummies, 2nd Edition

Trading Options For Dummies, 2nd Edition

Joe Duarte

ISBN: 978-1-118-98263-1

Feb 2015

384 pages


Navigate options markets and bring in the profits

Thinking about trading options, but not sure where to start? This new edition of Trading Options For Dummies starts you at the beginning, explaining the common types of options available for trading and helps you choose the right ones for your investing needs. You'll find out how to weigh option costs and benefits, combine options to reduce risk, build a strategy that allows you to gain no matter the market conditions, broaden your retirement portfolio with index, equity, and ETF options, and so much more.

Options are contracts giving the purchaser the right to buy or sell a security, such as stocks, at a fixed price within a specific period of time. Because options cost less than stock, they are a versatile trading instrument, while providing a high leverage approach to trading that can limit the overall risk of a trade or provide additional income. If you're an investor with some general knowledge of trading but want a better understanding of risk factors, new techniques, and an overall improved profit outcome, Trading Options For Dummies is for you.

  • Helps you determine and manage your risk, guard your assets using options, protect your rights, and satisfy your contract obligations
  • Provides expert insight on combining options to limit your position risk
  • Offers step-by-step instruction on ways to capitalize on sideways movements
  • Covers what you need to know about options contract specifications and mechanics

Trading options can be a great way to manage your risk, and this hands-on, friendly guide gives you the trusted and expert help you need to succeed.

Introduction 1

Part I: Getting Started 7

Chapter 1: Options Trading and the Individual Investor 9

Chapter 2: Introducing Options 19

Chapter 3: Trading Places: Where the Action Happens 33

Chapter 4: Option Risks and Rewards 51

Part II: Evaluating Markets, Sectors, and Strategies 67

Chapter 5: Analyzing Mood Swings in the Market 69

Chapter 6: Sector Analysis: Technical and Fundamental 91

Chapter 7: Practicing Before You Swing 117

Chapter 8: Designing A Killer Trading Plan 135

Part III: What Every Trader Needs to Know About Options 151

Chapter 9: Getting to Know Different Option Styles 153

Chapter 10: Protecting Your Portfolio with Options 175

Chapter 11: Increasing Profit Potential and Decreasing Risk 195

Chapter 12: Combination Strategies: Spreads and Other Wild Things 215

Chapter 13: ETFs, Options, and Other Sneaky Tricks 229

Part IV: Advanced Strategies for Options Traders 253

Chapter 14: Making Money without Worrying About the Market’s Direction 255

Chapter 15: Letting Volatility Lead You to Trading Opportunities 275

Chapter 16: Trading Profitably When Markets Move Sideways 305

Part V: The Part of Tens 333

Chapter 17: Ten Top Option Strategies 335

Chapter 18: Ten Do’s and Don’ts in Options Trading 349

Index 357