Essential Option Strategies: Understanding the Market and Avoiding Common Pitfalls

334 Pages·2016·3.08 MB·English

by  J. J. Kinahan

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Essential Option
Strategies
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Essential Option
Strategies
UNDERSTANDING THE MARKET
AND AVOIDING COMMON PITFALLS
JJ Kinahan
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Copyright©2016byJJKinahan.Allrightsreserved.
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LibraryofCongressCataloging-in-PublicationDataisavailable.
Names:Kinahan,J.J.,1963-author.
Title:Essentialoptionstrategies:understandingthemarketandavoiding
commonpitfalls/J.J.Kinahan.
Description:Hoboken:Wiley,2016.|Includesindex.
Identifiers:LCCN2016021570(print)|LCCN2016036186(ebook)|ISBN
9781119263333(hardback)|ISBN9781119291541(ePDF)|ISBN9781119291510
ePub)|ISBN9781119291541(epdf)|ISBN9781119291510(epub)
Subjects:LCSH:Options(Finance)|Investments.|BISAC:BUSINESS&
ECONOMICS/Finance.
Classification:LCCHG6024.A3.K5562016(print)|LCCHG6024.A3(ebook)|
DDC332.64/53—dc23
LCrecordavailableathttps://lccn.loc.gov/2016021570
CoverDesign:Wiley
CoverImage:Stockmarketcandlegraph©Butsaya/iStockphoto
PrintedintheUnitedStatesofAmerica
10987654321
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ToKaren,Kaitlin,Kevin,andKelly.Yourloveandsupport
makeallthingspossible.
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Contents
Foreword xiii
Preface xv
Acknowledgments xix
About the Author xxi
Part I Getting Started in Investing 1
Chapter 1 The Opening Bell 3
Probabilities 4
GettingStarted 5
Research 6
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Charts 11
CommissionsandFees 13
VirtualTradingPlatforms 14
Summary 15
References 15
Chapter 2 First Days of Trading 17
BriefHistoryofStockMarketAverages 17
KeyMarketIndexesToday 19
TheVolatilityIndex 21
Futures 22
TheBondMarket 25
FedWatch 26
EconomicIndicators 27
Earnings 28
FindYourNiche 29
Summary 29
References 30
Chapter 3 Know the Underlying 31
WhereDoOptionsTrade? 32
StockTalk 34
vii
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viii Contents
Exchange-TradedFunds 38
ShortSelling 40
OntheMargin 41
Summary 41
References 42
Chapter 4 Avoiding Mistakes 43
PositionSize 44
VolumeandLiquidity 44
OrderEntryTechniques 46
UnderstandRisk 48
Summary 51
References 51
Part II The Options Market 53
Chapter 5 Options Basics 55
StockOptions 57
OptionValue 61
ExerciseandAssignment 62
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VolumeandOpenInterest 64
IndexOptions 65
Summary 66
References 67
Chapter 6 Introduction to Call Options 68
CallOptionsversusStock 69
RiskandRewardofLongCall 70
Real-WorldExample 72
ShortCalls 75
IndexCallOptions 78
Summary 82
Reference 82
Chapter 7 Introduction to Put Options 83
LongPutsversusShortSelling 84
RiskandReward 84
Real-WorldExample 86
ProtectivePuts 89
IndexPutOptions 92
Summary 94
References 95
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