on August 14, 2011
I traded stocks and futures for the past 13 yrs using various platforms, including Tradestation, Streetsmart Pro, E-Trade and others. I hired mentors & tutors, took classes, seminars, hands-on schools, read books [you should see my stack],a nd worked with other traders who had sophisticated trading programs.
I stayed away from options, since in my personal research I concluded that due to the time deterioration nature of options and their complexities, I saw no way of trading options and winning-- ever.
While I kept losing money, I heard that my uncle was doing well in options. I couldn't believe it. I didn't believe it-- since I also heard that he didn't have a computer and lived in rural Georgia, talking only to his broker by phone and working with paper statements. I made it a point to interview my uncle, only to discover I indeed had a "rich" uncle with a "system" that worked. This "system" he merely said was "common sense"-- but after he explained it to me, the lights came on.
I then searched Amazon for books that specifically talked about the ONLY TWO options transactions my uncle traded with: money-secured puts and covered calls. I was led to this book by Dr Elias.
The first 11 Chapters are the most important-- and it is important to note that when Dr Elias is talking about calls or put transactions in these chapters, he is almost exclusively talking about money-secured puts and covered calls. There is only one place in the book where he warns you that to BUY a call or BUY a put places you in a position where you are working against the clock and that every minute, your investment is losing value. Take that warning to heart!
I also need to correct page 33, where the text should read [correction is in caps:]:
"Selling one CALL option implies that you are selling CALL options on the amount of shares of stock you are holding. Selling two CALL options implies that you are doing that on twice the shares you hold." The editor mistakenly used the word 'put' where CALL should be, in explaining a covered call.
Indeed, this book covers in detail, and with profitable variations, my uncle's strategy. The last two chapters on Thinking outside the Box and the Epilogue are valuable. The other chapters were of little value to me since I already know a great deal about chart patterns, reversals, candle sticks, doji's and the like. All this is good information, but -- in my view-- "filler" to the 'real meat' of the winning strategy of obtaining recurring option premiums, over and over and over again.
I have been trading this strategy for 3 months and I am up 15% with no losses.
Try getting that from a CD or Money Market Fund.
on April 16, 2011
I have been trading stocks and options for over 10 years, and I own over 25 books on trading, most written by some of the most respected names in the industry.
Having said that, I have learned more useful trading techniques from this 3rd edition of "Generate Thousands in Cash on your Stocks before Buying or Selling Them" by Dr. Samir Elias then I have from all the other books I own. This was a fascinating book to read, and if you have experience in the turbulent trading markets of the last few years, you can not help but be captivated from page one. In fact, I read it again as soon I finished it, just to make sure that I didn't miss any key points.
He has a unique writing style that cuts through all the clutter and gets right to the heart of the matter. If you have no background in options trading prior to reading this book, you would be well advised to read up on them before reading this book. Ron Ianieri's "Options Theory & Trading" being a great place to start the journey.
The techniques Dr. Elias uses to generate option income on stocks are presented clearly. In addition to options trading, there is a wealth of information on general trading methods that is extremely valuable to any trader. I know of no other book that gives a trader such a clear road map to achieving success in the stock maket.
If I was asked to suggest one book that could help a new trader learn how to trade successfully, it would be "Generate Thousands in Cash on your Stocks before Buying or Selling Them", hands down.
Pass this one over and you will do so at your own peril.
It is amazing to me that I can read over 150 books on investing and trading and do very well in the markets for almost a decade and still be blown away by what I learn in a new book. In combing Amazon for the best books on option trading this book with an almost 5 star rating after 59 reviews kept popping up. This book did not disappoint, while the option strategies are for advanced traders the book also covers all the basics of trading from psychology, risk management, the best technical indicators, charting, and the meaning of candlesticks. It is both a beginners book and has some of the most advanced options strategies I have seen.
The book does an excellent job with example after example of trades where the author trades around a core position generating thousands in profits while limiting risk by buying a stock through selling an in the money naked put, then after purchase selling covered calls when the stock reaches the top of a range and also selling more puts to buy additional shares when the stock gets to the bottom of the range. This strategy at times can remove up to 50% of the cost basis in a position in a few months. What was so amazing to me was that the strategies in the book can even work to generate profits in a stock position in a downtrend or at least greatly limit the losses.
The book wants you to profit from the fact that 75% of all options expire worthless. Some of the basic principles of the book are to buy back call options when they are worth 25% of the sell price. The idea is to lock in your profit and to repeat this process several times and not have to wait for the option to expire. Do not sell covered calls right after a steep fall in the stock price. Wait until it reaches 20% above its 20-day closing low to do that. It is important to pick strike prices carefully just above strong resistance. In your stock trading use fundamental analysis to decide what to buy and technical analysis to decide when to buy. One of the main principles: As the stock moves toward resistance, we sell calls and buy back any puts we previously sold for a profit. As it moves toward support, we sell puts and buy any calls we previously sold for a profit. The book trades off the principle that when you buy an option, time works against you. You can profit from combining selling options at the right time side by side with your stock trading for incredible profits.
I rank this book in the top three I have ever read on stock or option trading. This book and the author's trading are works of genius. The author's real returns are eye popping double digit monthly returns and triple digit annual returns. buy this book and keep it on your trading desk.
on June 7, 2008
This probably has to be the most valuable book I've bought to date on share/options trading. Maybe not a lot of new info for the "experienced" options trader, although it may be a reminder even to them of how truly effective certain strategies can be... especially with relatively little risk. But I would say a MUST-HAVE book for anybody else and especially for those considering a start in options trading.
It's a book that gets the point across of ensuring you're getting paid FIRST, when entering a trade, and not just hoping that you make money later.
Here is a book that goes beyond just the theory and ideas repeatedly covered in other books. The tools and methods suggested may not be new, but the concepts are certainly eye-opening, well described, and certainly achievable. It's more a book on how to EARN AN INCOME (more than capital growth) and how to TIME your trade/adjustments-to-trade to achieve this most profitably.
The greatest benefit I gained from this book was that it gave plenty of suggestions and ideas on how to salvage a bad trade, using strategies such as covered-calls, writing puts, and collars (to name the main strategies). He also does a great job describing how to "fine tune" his techniques, by using certain indicators to better time entry and exit points, as well as going through how to deal with the number of possibilities of a position nearing option-expiration dates or if a position was to adversely/unexpectedly move against you before then.
His techniques though are not all about salvaging any "bad" positions still held, but also useful in entering a new trade and maximising profits and reducing risk, through the use of selling options... and insights on how to monitor and profitably ADJUST those positions so as to maximise your returns by the time you exit the trades.
The best thing though about the book is that he uses real examples and goes through how to handle a number of possibilities (negative outcomes as well as positive). One truly begins to understand a trader's thought process and mentality before and after entering a position, by going through his detailed examples.... and it's reassuring that the results claimed can truly be achieved using strategies and means that are readily understandable and available.
The only negative(s) I have about this book, is that Samir doesn't go into the "finer" points about short-selling options and money management and could make somebody feel too overconfident and not appreciate ALL the risks involved. He eludes to them towards the end of the book but these very important points can easily be glossed over by the unwary reader. A lot of the examples he provides are stock/option positions in the tens of thousands... not so risky if you have an even larger starting capital, but potentially very risky if it's smaller and brokerage also begins to have en effect too.
For example one would need to: clarify how much option collateral is necessary to open a particular position, take into account brokerage, take into account "slippage" between ask/bid prices, be prepared for and have a plan to deal with an increase in implied-volatility (something not touched on at all). All these and more, will determine one's starting-off capital and how much risk one is prepared to take per position.... Determining individual risk isn't covered very well in this book, thereby making these strategies and returns, to appear deceitfully "easy".
Finally remember it's a percentage game, and it's very easy while reading his book, to get too carried away with the "tens of thousands" of profits one can make through his strategies... these returns are only possible on large initial positions... the percentage returns though will remain almost constant.
Despite this negative feedback, I still think that the book deserves 5 stars, purely on the excellent information provided. Strategies, their execution, and profit returns, are truly realistic and within the means of most people... provided one has an adequate starting capital and sound concepts of money management
on March 24, 2011
This book will not only show you a system to make money it teaches you how to trade. No fooling.A few zingers like "I don't know about you , but I'm not going to live forever."Along with very very specific trading examples that show prices and entry points and exit points on a variety of real trades on modern stocks,by the numbers.
I've been finding squeezes and options selling opportunities everywhere I look since reading this. I go to the text and compare the examples to the stock I'm looking at to construct stock/options strategies that are actually working !. I like this book very much. It will teach you how to trade.
(No, I don't work for the author)
on July 25, 2003
I have recommended this book to some people I know who have a hard time picturing a couple of different ways to generate income using options. [...]
But for people who are set on buying and holding, there are some good ideas here, especially on selling puts as a means of entering a stock. They are especially good in a market that is just grinding within a range as you can make money even if your stocks are going nowhere.
I have used the strategies here over the last two years (was doing them before I read this book) and had good success with them. Until this recent rally there were a lot of stocks that were grinding away at low prices, that had strong cash positions, that were great candidates for these strategies.
But you need a broker with very low commissions, [...] because premiums are getting lower and lower these days.
Someone new to options can easily make back their money with this one. So four stars for that, not five [...]. Go slow if you're a beginner, always anticipate the chance that you'll have to pony up money if a put is exercised against you. If you do that you'll be surprised how rewarding some simple strategies can be and how well they will fit into your existing approach.
on July 24, 2003
What I liked about this book is that the author does not focus on what you should have done but rather what you need to do after you have made the mistake of not protecting your profits gained in the crazy bull market. Even though the author clearly recommends on the third page of the first chapter that you set stop losses of no more than fifteen percent and sell a stock if the profit target is reached or the appropriate signals are given as in his examples on lsi and mck; his focus is to help the investor recover his lost money rather than the should have , would have or could have recommendations after the fact.
When I purchased this book I was looking for new strategies to turn things around rather than a broker telling me take your losses and move on to a better stock which he will recommend of course! The author clearly demonstrates that if you start implementing the strategies in the book before you buy a stock or right after you buy it; almost any stock can be turned into a winner. I have personally experienced real profits using ideas in this book and was able to call the author who has his telephone number in the book and was very helpful in recommending actions to take for my specific situation. The author also demonstrates how to turn time expiration, which is the number one enemy of an option investor to an ally.
The author discusses several techniques to insure profitability while raising cash, some of which are:
(1) Half half option selling which combines option selling with stock purchase to buy stocks below market while raising cash
(2) Boxing strategy where you will in effect box a stock between two positions dictated by the timing the author uses. You can then close each position dependent on the movement of the stock with both yielding profits
(3) Special techniques to raise cash on low priced stocks, even ones approaching bankruptcy. Take the Enron example, by monitoring the change of sentiment to highly negative on bankruptcy rumors, using a simple option strategy described in this book one could have pocketed a significant amount of cash on a short term bounce which was bound to come due to short covering. I pocketed a tidy profit on amr using this strategy. The interesting aspect to this is you do not need to spend any of your own cash!
(4) Timing techniques such as the 102030 test, tell tale spikes, fading momentum and several others all supported by real life examples.
on August 12, 2013
I do not have to tell anyone that most trading book writers derive the majority of their income from seminars , trading camps and books rather than from actual trading. Only a handful of trading book authors are successfull traders, and It was a pleasure to read a book written by someone who trades for a living.
Before moving to my current location, I belonged to a local trade group run by the author with a maximum allowable membership of fifty. In the eight months I belonged to the group, I saw traders including myself make profits above $3000 per week using methods most of which are detailed in this book, as well as the other trading book written by the same author.
After moving to my current location , I continued implementing the strategies I learned from the trade group as well as others from the book. Although my results do not match those obtained when I was an active member of the group, I am able to cash in between $30,000 to $50,000 per year on a 150,000 trading account.
I obtained these results by selling options on three to five stocks each month and collecting a net premium of near $1000 per stock. This is easily achievable if you pick the right stocks using ideas from author's other book "Explosive Stock Trading Strategies" and then combine them with concepts from this book to determine the right option parameters such as implied volatility , premium and expiration date.
For those who are interested in specifics, I start by scanning for stocks that meet the " Falling Knife" and "Momentum Shift" setups in the book "Explosive stock trading strategies". These setups offer, in addition to a high probability of upward reversal , unique option properties. These are :high option implied volatility and high vega, implying that the premium moves significantly with moderate moves in volatility. These properties allow selling low risk out of the money puts at strikes below market price for hefty premiums. Once the stock moves up the high vega results in a significant drop in the premium allowing me to buy back the option often for less than one quarter of the premium I obtained. Try this strategy and you will see that you do not need more than a handful of such stocks to create a respectable monthly income on your account.
on October 22, 2008
I do not usually write reviews but I felt compelled to write one on this book since it proved to be invaluable in the recent down market.
There is one chapter I found extremely useful for long term holders , namely chapter 14 titled "Do This Every Week and Never Lose Money in The Market". At first I felt that this is too much of a blanket statement, however, after I studied the real examples the author gives I decided to apply it to my long term holdings. This technique requires that you perform a couple of simple calculations each week on every stock. The final value is then plotted as one data point for each stock on a specific chart paper then the weekly data points are connected. To my surprise the negative divergence between the C/D indicator described in the book and price alerted me to the potential collapse of two of the financial stocks I hold. My first inclination was to ignore the warning especially considering the apparent name brand and stability of these companies .After reading the examples again in the chapter and remembering how companies like Enron and others collapsed I decided to get out. Within few weeks those stocks with many other financials literally fell off a cliff. In this sense this one chapter saved me thousands of dollars and the little time and effort I spent plotting data every week was certainly worth it.
Although the author explains step by step the calculation procedure, as well as normalizing and plotting the data on the chart, I recommend, if he happens to read this, to put out a CD with a program that can automatically plot such data. Doing this will allow investors to back test data and see with their own eyes the utility of this concept and thus will be more likely to use it.
Another valuable insight is presented in the parameters used to assess market trend. The author combines volatility, short interest and a timing indicator to determine whether the market is likely to go higher or lower. The past few months these indicators pointed to a weak and deteriorating market with rallies likely to be short lived.
I am in agreement with other reviewers that the unique combinations of technical indicators used and trading concepts in this book are easy to follow especially since they are supported by real stock examples. A word of caution, however in regards to expecting to use this book to trade complex option instruments such as butterflies, condors etc.. The author says in the introduction on page xvii that the book is not intended as a comprehensive options trading book detailing the many complex option strategies. His goal as he states it is "to use simple but effective options strategies in combination with stocks to enhance profits and control losses".
I strongly recommend this book to anyone looking to learn effective and practical money making and income generating tools.
on June 27, 2007
I had read the customer reviews on this book, and bought it based on them. My expectations were high, and this book exceeded them. This book is full of useful and practical information that I haven't found in any previous books.
The Technical analysis part of this book was worth the price of it alone. I have changed the way I trade after reading this book. The Technical analysis sections are so simple to use, and very practical to implement for any home investor.
The options strategies were good, I must admit, I thought there was a little cherry picking on the examples given, but all in all I was extremely impressed with this book and highly recommend it to anyone else.