Options for the Beginner and Beyond: Unlock the Opportunities and Minimize the Risks [Hardcover]

W. Edward Olmstead (Author)

Book Description

Publication Date: March 30, 2006 | ISBN-10: 0131721283 | ISBN-13: 978-0131721289 | Edition: 1

Brief, carefully paced lessons on options and trading strategies using verbal definitions and many trading examples for clarification. Each lesson builds on the one preceding it and explains options in plain English, from start to finish. Step-by-step coverage of controlling risk, protecting your investments -- even advanced strategies other introductory books ignore! Authored by Dr. W. Edward Olmstead, contributing editor to The Spear Report and editor of The Options Professor newsletter.

Editorial Reviews

Review

Trader, professor and editor of a successful options newsletter Olmstead consolidates his vast knowledge and experience into this accessible guide to options.

Appropriate for both beginners and more seasoned investors, this book covers everything from the basics of call and put options to advanced topics like delta-neutral trading and the Black-Scholes formula. Because buying options is cheaper and less risky than buying stocks, these time-limited investments are a great way to increase profits. Olmstead is a natural teacher, employing a concise, no-nonsense and easy-to-understand style. Readers will learn why “time is money,” how to use vertical spreads, how options can cut your tax bill and how to make profits even when you can't predict the market direction. Most importantly, Olmstead teaches how to “think like an option trader,” providing the market acumen necessary to maximize profit.

Sure to be appreciated by options traders of all levels.

 

--Kirkus Reviews, Vol. 3, Issue 3 (March 31, 2006)

About the Author

Dr. W. Edward Olmstead is the editor of The Options Professor, one of the world’s leading newsletters on options trading. He is also an options analyst for Spear Capital Management. He has consulted on short-term trading strategies with a member company of the Chicago Mercantile Exchange.

 

Dr. Olmstead is Professor of Applied Mathematics in the McCormick School of Engineering and Applied Sciences at Northwestern University. He has taught courses that cover both the theory for options pricing and practical strategies for trading options. Dr. Olmstead has received several awards including an endowed chair for teaching excellence and has been praised by his colleagues as “the quintessential teacher in our midst.”

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Product Details

• Hardcover: 256 pages
• Publisher: FT Press; 1 edition (March 30, 2006)
• Language: English
• ISBN-10: 0131721283
• ISBN-13: 978-0131721289
• Product Dimensions: 9.2 x 6.7 x 0.9 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.7 out of 5 stars  See all reviews (30 customer reviews)
• Amazon Best Sellers Rank: #4,802 in Books (See Top 100 in Books)
  • #45 in Books > Business & Investing > Popular Economics
  • #45 in Books > Business & Investing > Investing

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Customer Reviews

Most Helpful Customer Reviews

124 of 125 people found the following review helpful:

5.0 out of 5 stars Great book, practical pointers and easy read, December 14, 2009

By 

okiedo "Bill Ryan" (Sparks, Nevada) - See all my reviews

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This review is from: Options for the Beginner and Beyond: Unlock the Opportunities and Minimize the Risks (Hardcover)

Ok, I haven't read "hundreds" of Options books and I am not a sophisticated trader, however I have been trading options for over 10 years, probably 15 years by now. I do it on a small scale like many of the people who will read this book. I have attended two expensive "Options Seminars" and a couple of freebies. I was very reluctant to read Professor Olmstead's book since he is a math professor and I have trouble with anything other than basic math. I was also put off by all the claims of how great a teacher he was, since often these claims in the preface of a book are the sure kiss of a mediocre read. I actually had to force myself to start this book since I ordered 4 different books on Options at the same time. Boy, was I surprised, pleasantly. He does get right to the point and moves on quickly to the next point in clear, succinct language that "even a Cave Man" can follow. I expected erudite and esoteric for a writing style and, instead, got "meat and potatoes" with gravy. This was a terrific book and I will read it again and again. It was more than worth the price of admission. My favorite trade for some years now has been the vertical call bull spread option and I thought I was doing OK with it, not terrific, but "OK". Dr. Olmstead taught me in 2 pages that I have been missing out on optimizing the return on these trades. I had it embedded in my head the concept of Theta and Time Decay and how detrimental that is to a Call or Put Option... and that was all true, however in the case of spread trades once you are In The Money then Time Decay is actually your friend... and Dr. Olmstead shows you how this is true. I was bailing out of these trades with a profit, when I could have held on to the Expiration date and made so much more of a profit. It is a simple concept and I am sure most people who trade spreads already had that down... but for some reason I didn't... not until I read: Optons For The Beginner And Beyond. It is not as though that is the only thing I got out of this book. There is so much more packed into this small volume. I would expect that the professional traders will lambast this book just to show their greater level of knowledge and sophistication, however not all of us are professional traders. I think any beginning trader or any intermediate level trader will find this book to be helpful. I recommend reading it first and then following up with: Options Made Easy, second edition by Guy Cohen. They make a terrific combination read. Cohen's book is often criticized for not including enough of the option strategies. Olmstead discusses a larger amount of strategies and Cohen fleshes out some of the material of Dr. Olmstead. To me, they are complementary reads.

141 of 154 people found the following review helpful:

4.0 out of 5 stars Interesting and clearly written book for those beginners itching to speculate in options, May 23, 2006

By 

Craig Matteson (Saline, MI) - See all my reviews
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This review is from: Options for the Beginner and Beyond: Unlock the Opportunities and Minimize the Risks (Hardcover)

Trading in options by regular folks looking for big returns has been catching on and I am not sure why. Are they really trying to use options to alter the risk of their retirement portfolios - either lowering the risk to ensure the preservation of capital or to add volatility with the design of increasing returns? Probably not. The average person is probably acting as a speculator and placing bets. For the market, this kind of behavior is a good thing because it adds noise that allows the professionals greater opportunities to profit. Now, think about what that means. You know the old saying about sitting down and a poker table and if you can't spot the patsy that it's you? Remember, options are an area of the market where there are only winners and losers. These are instruments where one side wins and the other side loses. However, in the right hands they are very important and useful financial instruments.

This book is not a textbook on option theory, pricing, or how to use them in the context of lowering or increasing risk in a portfolio. It is a basic how to text for buying and selling options as speculative investments. The author, W. Edward Olmstead, is a math professor at Northwestern University and teaches a course in options. His experience with the topic shows because the text is clear, easy to read and to grasp. That is a fine accomplishment because learning how options work can be a mind bending experience for the first timer. Admittedly, he doesn't take the reader into pricing. Here, as an investor, you basically take the price given and make a decision. Of course, developing a position about what the price "should be" is what professional options investors do and if you are just licking your finger and sticking it into what you believe to be the financial breeze, well, just remember I warned you.

Olmstead organizes the book into three parts. The first explains the basic concepts of what options are and some ideas about buying and selling them. His notions of when to buy and sell and how to use the way options change their value throughout their "life" are quite interesting. It would be fascinating to find out how well they work in real life and if they did, why these abilities to gain aren't simply priced away by people trading against them.

Anyway, the second part goes into trading strategies and describes various kinds of spreads, collars, and so forth. Of course, these positions are geared towards fashioning risk for certain kinds of outcomes. They are not magic in themselves and are just as likely to end up worthless as any other set of options, but the downside and upside will be more specifically defined.

The third part contains special topics (including DAY TRADING with options - oh boy, talk about walking into a financial mind field wearing lead boots), he touches on pricing and volatility and delta neutral trading.

An interesting book that can help the beginner get some idea about options and can help those itching to trade in them begin to do so. Just remember the old childhood saying that knowledge is when you know the stove is hot. Wisdom is what you have on your fingertips after you touch the hot stove.

78 of 84 people found the following review helpful:

5.0 out of 5 stars LISTEN BUY THIS BOOK!! It's the best book on Options Trading., February 28, 2008

By 

D. Hamlett (Brooklyn, USA) - See all my reviews
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This review is from: Options for the Beginner and Beyond: Unlock the Opportunities and Minimize the Risks (Hardcover)

I have taken hours of classes on how to trade options. I have read lots of books on how options work and how to trade them. I have traveled hundreds of miles and spent thousands of dollars to learn how to become a better options trader. This book is sooooo... good if I had read this book first I would have made more money, loss less money, and I could have gained 100% more value from all the other options training I have done. If you are looking at trading options this is your starting point! If you already trade options then use this book as a review, becasue it has some very lucid explinations e.g.Chapter 29 - IV (implied volatiltiy) and the Black Scholes model. Now this will not be the only options book that you will get, and it does not go into super detail depth like a Sheldon Natenberg, but it is easy to read, it gets directly to the point and it's relatively small compared to other options books. The chapters are written independently of one another, so you can skip through the book and read exactly what you want. So if you just want to know how a double diagonal works then you read that chapter and your done. Thank You Professor Olmstead!They need to rename you Uncle Option :)