A practical blueprint to successful options trading. Learn to make money each month safely (with small risk) and make capital grow.
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Most Helpful Customer Reviews
27 of 27 people found the following review helpful:
1.0 out of 5 stars
Grossly inaccurate,
By A Customer
This review is from: The Insider's Automatic Options Strategy: How to Win on Better Than 9 out of 10 Trades with Extremely Low Risk (Hardcover)
Which is worse, a NYC taxi driver (Wade Cook) giving oversimplified financial advise, or a PhD computer programmer writing on investments? The common denominator is that both present and overemphasize the "sure thing" concept.Mr Schiller demonstrates why people with PhD in computer science should not write a book on investment. The intro itself is misleading with "no risk, short spread,protected straddle" in bold print in the same paragraph. Three shortcomings 1) terminology is absolutely WRONG; 2) understanding of "assignment" GROSSLY FLAWED; and 3) ignores margin requirements where some examples are not possible on a $50,000 account. TERMINOLOGY: What he describes as a "short spread" is actually a short (or naked) straddle - selling a call above the market and a put below the market. By industry standard definition, a "spread" is selling AND buying a call (or put) on the same security at a different strike price. Ironically, what he describes as a "protected straddle" is actually 2 spreads - a call spread and a put spread straddling the market price. He then goes on to explain more complex positions while intermixing spread and straddle terminology. ASSIGNMENT: On page 47, he notes that the LONG option in a protected straddle or butterfly spread are "in the money (by design) and subject to involuntary early assignment." He ignores the fact that the LONG position is further out than the SHORT position to create the net credit that he advocates. More important, long options are NEVER assigned, only short options are. Long options are EXERCISED at the instruction on the holder which starts the assignment process. MARGIN. Too complex for this review, but totally ignored in the book. Some firms, like Schwab, have $50,000 min equity requirement for naked options on broad based indexes (like the OEX) That is net remaining after the higher of 3 other rules. His $50,000 account wouldn't support 1 contract, much less the total of 17 contracts on page 82. You can't trade yourself into a maintenance call!!!! READER BEWARE!
20 of 21 people found the following review helpful:
3.0 out of 5 stars
I made money with this system, but BE CAREFUL,
By A Customer
This review is from: The Insider's Automatic Options Strategy: How to Win on Better Than 9 out of 10 Trades with Extremely Low Risk (Hardcover)
I purchased this book in the mid 1990s, and began trading commodities options with a small account (because I did not have enought capital to meet the margin requirements for trading the stock indexes). I traded crude oil short spreads exclusively, and made money consistently for several months. However, I ignored the money management rules to my peril. I did not close out positions that were in the money at expiration, thinking that I would simply buy the contracts to cover the options that were exercised. WRONG!!! The market went limit up for several days, and when I was finally able to get out, I had given back 10 months worth of profits. I was so shaken by the experience that I stopped trading for a long time. Although I agree with another reviewer that the text can be confusing, and Dr. Schiller does erroneously mix his terms, the underlying statistical model appears valid. I paper-traded the system based on historical and real-time data before committing money to it, and I actually used it profitably for some time. I would consider the book a useful addition to a trader's library, subject to the caveats mentioned.
25 of 28 people found the following review helpful:
5.0 out of 5 stars
A consistant step by step plan to earn a trading income,
By A Customer
This review is from: The Insider's Automatic Options Strategy: How to Win on Better Than 9 out of 10 Trades with Extremely Low Risk (Hardcover)
Not just theory and abstract ideas, this book states a specific trading plan that I have followed and profited from. The book compares 4 or 5 ideas to compare, but then tells the reader, this is the one to follow. It involves the selling (writing) of far out of the money OEX index options, short term. Performed as the author states, it is a consistant winner with controlled downside risk. Less than 200 pages and easy to read
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