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Trading Stock Options: Basic Option Trading Strategies and How to Use Them to Profit in Any Market
 
 
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Trading Stock Options: Basic Option Trading Strategies and How to Use Them to Profit in Any Market [Paperback]

Brian Burns (Author)
4.1 out of 5 stars  See all reviews (8 customer reviews)

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Book Description

November 15, 2009
In Trading Stock Options, experienced option trader Brian Burns explains the basics of stock options and shows you how to trade the most successful option strategies. As you begin your journey on the option path, you'll have the luxury of real-life trade examples to show you the way. The diagrams and charts help turn the complex world of options into easy to visualize and simple to understand strategies that even the most novice of traders can utilize.

Trading Stock Options will show you how you can use options to:
* Get paid to buy and sell your favorite stock
* Purchase stocks for less than their current price
* Buy insurance on stocks in your portfolio
* Profit when stocks lose value
* Perform short-term trades with less money than trading the stock

 
From the Introduction: "Through my experiences with option trading, I have tried almost every strategy I could find. In this book, I will be discussing the strategies that I use the most and feel are the best available. I will take you through a number of actual trades as they occurred and show you what I did right and what I did wrong. I will also show you plenty of theoretical examples of how the strategies work and what factors will influence which strategy is the best for whatever situation the market throws in front of you. In 2007 I was the first place finisher in the Zacks.com 4th Quarter 2007 options trading contest with a return of 212%. It hasn't always been pretty but I have used both my gains and my losses to learn, both of which I'll be discussing with you."

From the Back Cover "Many traders and investors dismiss stock options as either too complex or too risky. But did you know that options can be easily understood and the risk easily managed? This book will show you the basics of stock options in easy to understand terminology. You will be able to read option quotes with ease, get an option enabled trading account, and trade basic option strategies in no time."

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Editorial Reviews

From the Inside Flap

Welcome to the wonderful world of options. I have structured this book to give you the basics of option trading without bogging you down with complex pricing methodologies or technical chart reading theories. I will show you that you do not have to be a math wizard or a market "insider" to profit with options. This book is full of my actual trades as well as plenty of other trading examples. After reading this book, you will be able to read option quotes with ease, find a broker, and start trading with some of the strategies discussed.

The world of options opens up a number of techniques that can be implemented in order to increase your rate of return as well as mitigate risk. There are endless hedging possibilities and new strategies are being developed all the time. Through my experiences with option trading, I have tried almost every strategy that I could find. In this book, I will be discussing the strategies that I use the most and feel are the best available. I will take you through a number of actual trades as they occurred and show you what I did right and what I did wrong. I will also show you plenty of theoretical examples of how the strategies work and what factors will influence which strategy is the best for whatever situation the market throws in front of you.

Initially, before trading options, I was a "stock only" trader who was just curious about alternative investment products. I had often heard stock options mentioned, usually in the form of Employee Stock Options. I began to learn as much as I could about option trading and testing the strategies as I learned them. In 2007 I was the first place finisher in the Zacks.com 4th Quarter 2007 options trading contest with a return of 212%. I currently trade options as a speculative tool as well as a way to hedge my risks on the individual stocks that I own. It hasn't always been pretty but I have used both my gains and my losses to learn, both of which I'll be discussing with you. Often options get a bad reputation from the potential losses that can occur from owning options as well as selling what are called "naked" puts and calls. These topics will be covered in detail later but the important thing to remember is that the less you know about an investment the more risk you are tackling. Any investment product in the market can potentially cause large losses if the investor does not fully understand the risk he or she is taking on.

Once you gain some familiarity with options, I would advise you to paper trade option strategies for at least six months. Paper trading is a valuable tool; it will get you involved in the market and allow you to start following the individual stocks that you will be trading the options of. As with any investment tool, options may not be for everyone. The potential for large losses is real and should be evaluated. I would also advise any investor to use no more than 5% of their available investment portfolio in options. This is because many of the option strategies are considered speculative. As with any investment, if there are large gains to be made there are also large losses to be had.

Even with the dangers in mind, I will show you how to calculate your risks ahead of time. What investors often fail to understand about options is that, if correctly implemented, options can, in fact, carry less risk than some stock. There are plenty of option strategies that are specifically tailored to lower an investor's risk profile. Options can be used to generate income and can be used as a form of insurance against the stocks that you own in your portfolio.


Product Details

  • Paperback: 206 pages
  • Publisher: P & L Publications (November 15, 2009)
  • Language: English
  • ISBN-10: 0578041804
  • ISBN-13: 978-0578041803
  • Product Dimensions: 6 x 9 x 0.4 inches
  • Shipping Weight: 10.4 ounces (View shipping rates and policies)
  • Average Customer Review: 4.1 out of 5 stars  See all reviews (8 customer reviews)
  • Amazon Best Sellers Rank: #111,442 in Books (See Top 100 in Books)

More About the Author

Brian Burns is a private investor and option trader. He started his trading career by short-term and day-trading stocks but found option trading to be more exciting and profitable. In addition to this book, he also writes trading/investing articles which have been published on websites such as TheStreet.com. He holds degrees in Finance and Philosophy.

 

Customer Reviews

8 Reviews
5 star:
 (4)
4 star:
 (3)
3 star:    (0)
2 star:    (0)
1 star:
 (1)
 
 
 
 
 
Average Customer Review
4.1 out of 5 stars (8 customer reviews)
 
 
 
 
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8 of 8 people found the following review helpful:
5.0 out of 5 stars A great introduction to Options Trading, March 1, 2010
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This review is from: Trading Stock Options: Basic Option Trading Strategies and How to Use Them to Profit in Any Market (Paperback)
It's easy to understand why so many people are deathly afraid of trading stock options. The novice investor unfamiliar with options trading can pick up most books on the subject and conclude, "Wow, this is way over my head". Not so with TRADING STOCK OPTIONS by Brian Burns. This is the best book I have seen on learning the fundamentals of options trading.

Chapter 1 is a basic introduction to options and Burns keeps it simple so any investor should come away with a basic knowledge of the subject. Chapter 2 is a brief overview of options pricing and the Greeks.

Chapter 3 is the bulk of the book and covers actual trading examples and strategies. The reader will follow step by step how to make covered calls, long calls, long puts, straddles, strangles and writing puts. New options traders are not going to be ready to make actual trades but can certainly begin paper trading to get a feel for what they don't yet know.

At under 200 pages, this is the best introduction to options trading I have found. I highly recommend this for new traders.
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3 of 3 people found the following review helpful:
5.0 out of 5 stars Love the Real Trades, January 9, 2010
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This review is from: Trading Stock Options: Basic Option Trading Strategies and How to Use Them to Profit in Any Market (Paperback)
One reason that I gave this book 5 stars is because it is full of actual trade data. Burns takes you through his actual trades as they occurred. This is a great way to learn the strategies and I've been recommending the book to people I know. The book is geared for beginners but I found just reading his trades to be interesting in their own account.
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3 of 3 people found the following review helpful:
5.0 out of 5 stars Sound Stock Option Strategies, December 11, 2009
This review is from: Trading Stock Options: Basic Option Trading Strategies and How to Use Them to Profit in Any Market (Paperback)
I found the book a good resource for someone who is beginning to venture in to the world of stock options. What I found useful is the actual trading strategies employed by the author. His frank examples of his winners and losers and the strategies applied presented clear and easy examples to understand. I recommend this book for anyone who wants to journey in to the world of option training.
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