Profit with Options: Essential Methods for Investing Success (Hardcover)

by Lawrence G. McMillan (Author), Marketplace Books (Author) "A call option gives you the right to purchase something at a specified price, and that option is normally "good" for only a predetermined length..." (more)
Key Phrases: reverse volatility skew, arbitrage buy programs, call backspread, Monte Carlo, Wall Street, Dow Jones (more...)

Editorial Reviews

Product Description
"McMillan is the top name in options education, bar none."
—Paul Stevens, President, Options Clearing Corp. and The Options Industry Council

"Larry wrote the book we built an industry on," notes Ned W. Bennett, CEO of OptionsXpress, referring to McMillan’s thick volume, Options as a Strategic Investment. A decade later, McMillan on Options focused on McMillan’s own personal strategies and favored techniques. Now comes Profit with Options, a treasure that complements his previous works and continues his legacy of educating investors on the benefits and strategies for incorporating options into a winning investment program.

Profit with Options is a unique course book that covers every phase of the options trading process step-by-step, and then reinforces individual concepts through end-of-chapter quizzes, thereby allowing readers to refine their skills. Each chapter covers a specific concept and closes with a set of review questions and answers that will assist the reader in implementing the material covered. Focused on practical ways to profit from stock, index, and futures options, this guide covers basic to advanced concepts and includes everything you need to consistently "profit with options." Learn how to determine whether to buy options or the underlying stock, use price and volume as technical indicators, apply index options as portfolio protection, and implement powerful volatility strategies.

When it comes to options trading education, no one is more respected than "Trader’s Hall of Fame" award-winner Larry McMillan. Through his bestselling books, popular newsletters, and packed trading workshops, he has become a true industry icon. In Profit with Options, McMillan’s newest offering, you’ll learn powerful, proven, and profitable options trading techniques with the expert guidance of one of the world’s foremost authorities.

From the Inside Flap
Profit with Options: Essential Methods for Investing Success is a powerful new guide that allows every investor to learn about options by benefiting from the wealth of knowledge and years of experience of a true options expert. Renowned options authority and "Trader’s Hall of Fame" award-winner Lawrence McMillan complements his prior books with this thorough guidebook. No matter what your background, regardless of your experience level, McMillan’s new hands-on manual takes readers on a "course" through the complete options trading process and provides end-of-chapter questions that will help you reinforce tactics and refine options trading skills–preparing you to apply them with savvy and strength before you are out in the real trading arena.

Profit with Options takes you from a basic clarification of terminology to straightforward explanations of complete trading methodologies, for both the beginner and the veteran trader, with chapters on direct and contrary indicators, protecting a stock portfolio, and trading volatility. Through hard-won knowledge gleaned from years of options trading experience, McMillan provides you with in-depth coverage of trading systems, factors that affect markets and market behaviors, and general portfolio-protecting strategies, while uncovering the practices of successful options strategies. Focused on actual ways to generate profits from options trading, this accessible guide will show you how to:

• Use options as predictors of market behavior
• Determine when to engage in straddle buying
• Interpret OEEX and VIX
• Choose the trading system that’s right for you
• Reduce the cost of portfolio protection
• Understand and use the measures of option price changes ("greeks")
• Analyze the reasons behind volatility changes

. . . and much more.

Profit with Options will challenge you every step of the way, and the valuable "Q&A" section at the end of each chapter offers you the rare chance to test your options knowledge before going into real-world trading situations–where time and money are something you cannot afford to lose.

In clear, easy-to-follow terms, Profit with Options arms you with the facts you need to understand options–stock, index, and futures options–as well as the tools you need to implement profitable options trading strategies. Whether you’re looking for new investment sources in a bear market or seeking hedge protection in a bull, Profit with Options is a lively, one-stop reference and vital tool that can help you achieve your investment goals.

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Product Details

• Hardcover: 276 pages
• Publisher: Wiley; 1st edition (May 15, 2002)
• Language: English
• ISBN-10: 0471225312
• ISBN-13: 978-0471225317
• Product Dimensions: 9 x 6.2 x 1.1 inches
• Shipping Weight: 1.7 pounds (View shipping rates and policies)
• Average Customer Review: 2.9 out of 5 stars See all reviews (7 customer reviews)
• Amazon.com Sales Rank: #669,930 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

30 of 31 people found the following review helpful:

1.0 out of 5 stars Sloppy editing makes it difficult to learn from this book, November 27, 2003

By A Customer

Profit with Options seems to have been thrown together from a series of talks, with little attempt at editing. The book is replete with mistakes that render the book useless to a novice options trader and frustrating to read for an expert.

The figures are particularly bad, with incomplete or incorrect legends. On page 9, for example, are shown profit graphs for puts and calls. One problem is that the graph for calls is labeled "Put purchase" and the graph for puts refers to buying a call. This is worse than useless to a beginner because it is flat out wrong, and makes the expert wonder whether anything else in the book is sufficiently reliable to trust. Another problem with this figure is that neither graph has any numbers on the axes.

Poor labeling of figures renders indecipherable many of the figures in Chapter 2, which deals with options as direct indicators. Figure 2.1, for instance, does not provide dates on the X-axis, so when the text says something about what happened on July 29, it's difficult to know where to look on the chart. Many of the charts in this chapter include several data plots, apparently including price and option volume, but the plots are not labeled. Sometimes the text refers to put volume and call volume, but the charts don't indicate which is which.

The text often is no more clear than the figures. The discussion on stops on page 133, for example, states: "So you gave back a lot by waiting for your stop to be hit. Or did you Will, in this case you did, but what if the S&Ps had gone on to 1335?" Who the heck is Will, and what does he have to do with anything?

The "review" questions are not really review questions. I expected them to review subject matter that was covered in the preceding chapter. However, the questions are directed to material is not covered in the chapter.

I'm going to try a different book on options. It's just too frustrating to get anything useful out of this one.

12 of 12 people found the following review helpful:

4.0 out of 5 stars Pricey, some good stuff, January 11, 2006

By	J. G. "J. G." (USA) - See all my reviews

This book could probably be considered the Chevy in McMillan's fleet, with McMillan on Options and Options as a Strategic Investment standing as the Cadillac and Corvette, respectively. It's a worthwhile addition, but if you're new to McMillan, you'd probably be better-served by one of his more well-known works.

This is a relatively short book that provides some tools for using options as direct or contrary indicators, and actual strategies for employing options to profit off expected movement in price or volatility. The book also provides some good guidelines for evaluating indicators like the put/call ratio (index and equity-only), VIX (old VIX, now VXO), and how to interpret volume in an options chain for possible signs of predictive insider trading. Later chapters get a little more complicated, covering some strategies for volatility buying and selling, etc.

The "workbook" end of this volume is rather thin, basically comprised of 12-20 questions at the end of every chapter covering what you've learned, with an answer index in back.

If you're a McMillan fan or new to options, you'll probably like this book. Otherwise, check into his better-known volumes first.

12 of 12 people found the following review helpful:

2.0 out of 5 stars Not worth the price, January 25, 2005

By	Sriram Ganesh - See all my reviews (REAL NAME)

I have read McMillan's other books and found them interesting and educational. But this book does not have any eyeopening material. If you are a beginner in options then this is not for you; if you are not a beginner then this book is not for you also. You probably know how volatility affects option prices etc., The author has just filled the pages with many historical charts of stocks. Instead he could have just illustrated his points with a couple of charts for each topic. Instead of a book this just deserves to be a booklet.