Option Strategies: Profit-Making Techniques for Stock, Stock Index, and Commodity Options, 2nd Edition (Hardcover)

by Courtney Smith (Author) "This chapter will give you the basics of options..." (more)
Key Phrases: covered put write, middle strike price, selling time premium, Black-Scholes Model, Price of Underlying Instrument Figure, General Widget (more...)

Editorial Reviews

Product Description
Learn to maximize your trading power with...

OPTION Strategies

Find out how options really work with this complete introduction to options valuation and trading. In this revised and expanded edition, top options expert Courtney Smith details the ins and outs of this lucrative, yet complex, financial instrument. From the working fundamentals to the most innovative pricing models, Option Strategies gives you the information you need to make a wise and successful investment. Whether you want to bull up or bear down, buy puts or sell calls, here's where you'll find:

• Descriptions of option basics: carrying charges, transaction costs, underlying instruments, and premiums
• Details on advanced strategies: bull, bear, and calendar spreads; straddles and strangles; synthetic longs and shorts
• "Decision Structures" that enable you to select an appropriate options strategy and evaluate its risks and rewards in various market environments

Written in clear, nontechnical language, this comprehensive guide makes the complex world of options easier to grasp. For traders and hedgers—both novice and professional—this is the only book to have for getting to the bottom of options, and staying on top of the latest strategies.

With their high-profit yields and the flexibility they offer in buying and selling, options are a preferred trading vehicle for investors. Trading options, however, is as complex as it can be lucrative. Even for experts in the field, getting a firm grasp on this high-risk activity can be difficult. Option Strategies makes it easier, offering all the tools you need to invest safely and profitably, using the latest trading techniques.

Now revised and updated, this comprehensive guide by one of the industry's top experts covers all the essentials, from the fundamentals of options to the intricacies of options valuation and trading. You'll find details on everything from carrying charges and strike prices to commissions, interest rates, and break-even points. Beyond the basics, you'll also learn about the bull and bear strategies needed to buy and sell calls, puts, spreads, straddles and combinations, synthetic positions, arbitrage, and much more.

Additionally, major strategies are highlighted and accompanied by a unique "Decision Structure" that gives you a clear picture of how each strategy works, and advice on how to plan your investment better. Consisting of a series of questions and answers, these decision structures assist you in analyzing potential trades, determining your objectives and the amount of risk you're prepared to take, and deciding what follow-up action to take once you've entered a trade. To help you tune in to current trading trends and practices, this newest edition has been expanded to cover the latest practical and innovative trading strategies, and advanced options techniques such as implied volatility.

Filled with examples, charts, and graphs, this concise, accessible book is the only guide you'll need to stay on top of the high-risk, high-profit game of options.

From the Back Cover
Learn to maximize your trading power with...

OPTION Strategies

Find out how options really work with this complete introduction to options valuation and trading. In this revised and expanded edition, top options expert Courtney Smith details the ins and outs of this lucrative, yet complex, financial instrument. From the working fundamentals to the most innovative pricing models, Option Strategies gives you the information you need to make a wise and successful investment. Whether you want to bull up or bear down, buy puts or sell calls, here's where you'll find: Descriptions of option basics: carrying charges, transaction costs, underlying instruments, and premiums Details on advanced strategies: bull, bear, and calendar spreads; straddles and strangles; synthetic longs and shorts "Decision Structures" that enable you to select an appropriate options strategy and evaluate its risks and rewards in various market environments

Written in clear, nontechnical language, this comprehensive guide makes the complex world of options easier to grasp. For traders and hedgers--both novice and professional--this is the only book to have for getting to the bottom of options, and staying on top of the latest strategies.

With their high-profit yields and the flexibility they offer in buying and selling, options are a preferred trading vehicle for investors. Trading options, however, is as complex as it can be lucrative. Even for experts in the field, getting a firm grasp on this high-risk activity can be difficult. Option Strategies makes it easier, offering all the tools you need to invest safely and profitably, using the latest trading techniques.

Now revised and updated, this comprehensive guide by one of the industry's top experts covers all the essentials, from the fundamentals of options to the intricacies of options valuation and trading. You'll find details on everything from carrying charges and strike prices to commissions, interest rates, and break-even points. Beyond the basics, you'll also learn about the bull and bear strategies needed to buy and sell calls, puts, spreads, straddles and combinations, synthetic positions, arbitrage, and much more.

Additionally, major strategies are highlighted and accompanied by a unique "Decision Structure" that gives you a clear picture of how each strategy works, and advice on how to plan your investment better. Consisting of a series of questions and answers, these decision structures assist you in analyzing potential trades, determining your objectives and the amount of risk you're prepared to take, and deciding what follow-up action to take once you've entered a trade. To help you tune in to current trading trends and practices, this newest edition has been expanded to cover the latest practical and innovative trading strategies, and advanced options techniques such as implied volatility.

Filled with examples, charts, and graphs, this concise, accessible book is the only guide you'll need to stay on top of the high-risk, high-profit game of options.

See all Editorial Reviews

Product Details

• Hardcover: 336 pages
• Publisher: Wiley; 2 edition (June 13, 1996)
• Language: English
• ISBN-10: 2744101788
• ISBN-13: 978-2744101786
• ASIN: 047111555X
• Product Dimensions: 9.2 x 6.2 x 1.1 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 3.2 out of 5 stars See all reviews (4 customer reviews)
• Amazon.com Sales Rank: #1,198,665 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

19 of 19 people found the following review helpful:

4.0 out of 5 stars The fundamentals of Option Strategy, March 28, 1999

By A Customer

Option Strategies is an excellent intermediate treatise on option trading. While it doesn't go deeply into option pricing and implied volatility, its focus on strategy and decision structure serves the reader well. Almost every major position type, from the basic buys and writes to the more complex, such as ratio spreads and butterflies are covered. Each position is dissected in detail, with emphasis on how to deal with adverse and positive price impacts.

In the pantheon of trading tomes, Courtney Smith's work should appeal to those looking for a sound foundation in option strategy. It is one place where a trader can look at any idea and figure out which type of play offers the best risk/reward alternatives. A solid non-technical book.

14 of 15 people found the following review helpful:

1.0 out of 5 stars Poorly edited mess, April 23, 2002

By	JZ (Chicago , IL USA) - See all my reviews

This book contains absolutely no information on how to judge whether a particular option is over- or under-priced, or how to arrive at either a bullish or bearish outlook. The idea is that you have already come to some conclusion and then you consult the book to determine how you should play the option. That would be fine if the book did not contain numerous errors, all due to the fact that this book apparently was not proof-read. For example, if your outlook is bullish, you find the strategy for putting on a call spread, and select the type of spread you want to do. The author then copied the same instructions into the section on bear spreads, and then tried to change all the "calls" to "puts" or the "buys" to "sells." Of course, he missed many such changes, and there are multiple instances where the word "call" appears where it should read "put," and where "buy" appears when it should be "sell." If you buy this book, you will have to make your own corrections in it, or you may follow the instructions right into the poorhouse. I consider the money I spent on this book to be wasted.

6 of 9 people found the following review helpful:

3.0 out of 5 stars Hard to read textbook, December 1, 1999

By	D. F. (NJ) - See all my reviews

The bad news: This is a classic textbook that requires all your attention and more. Even an experienced option trader can get lost easily. The good news: It is a comprehensive guide and reference book which I use once a week to help me choose the right move.