How to Price and Trade Options : Identify, Analyze, and Execute the Best Trade Probabilities, + Website.Series: Bloomberg Financial SerPublisher: Somerset : John Wiley & Sons, Incorporated, 2015Copyright date: ©2015Edition: 1st edDescription: 1 online resource (225 pages)Content type:
- online resource
- HG6024.A3 -- .S5145 2015eb
|Item type||Current library||Call number||Status||Date due||Barcode||Item holds|
Intro -- HOW TO PRICE AND TRADE OPTIONS -- Contents -- 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 -- Cash Accounts -- Reg‐T Margin Accounts -- Portfolio Margin Accounts -- Commissions -- Interest Rates -- Stock Borrow and Loan -- Shorting Stock -- Easy to Borrow -- Hard to Borrow -- Impossible to Borrow -- Buy‐Ins -- Short Interest -- Where Your Broker Matters -- Trading Platforms -- Easy to Use -- Historical Data -- Mobile Platform -- Trade Probabilities -- Conclusion -- CHAPTER 3 Building the Foundation -- Option 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 -- EULA.
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.
Description based on publisher supplied metadata and other sources.
Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2019. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.