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Option Theory and Trading: A Step-by-Step Guide To Control Risk and Generate Profits (Wiley Trading) (Hardcover)

admin — Fri, 15 Jan 2010 23:43:28 +0000

Praise for Options Theory and Trading “I’ve had the pleasure of teaching with Ron Ianieri at numerous live seminars for traders and investors, and one thing is for sure-Ron knows options! Now Ron has created a thorough, easy-to-read guide that you can benefit from in many ways, whether you are experienced in options trading or just starting out. I believe you will find Options Theory and Trading like Ron himself . . . full of knowledge, entertaining, fast-paced, and a joy to be around.” —Price Headley, CFA, CMT, founder of BigTrends.com “I’ve had the pleasure of knowing and working with Ron for many years now. When managing funds in our asset management company, Ron has always been our ‘go-to guy’ on anything options-related. I’ve also taught a number of seminars side by side with Ron over the years where I’ve always come home knowing more about options than when I left! The man is truly the ‘pitbull’ of derivatives.” —Peter Reznicek, Chief Equi (more…)

Covered Calls and LEAPS–A Wealth Option + DVD: A Guide for Generating Extraordinary Monthly Income (Wiley Trading) (Hardcover)

admin — Thu, 31 Dec 2009 22:40:26 +0000

In this one-of-a-kind “how-to” guide, Joseph Hooper and Aaron Zalewski provide step-by-step instructions for generating large monthly cash returns from almost any stock investment—while at the same time decreasing the risk of stock ownership. Filled with in-depth insights and proven techniques, this book is the definitive, rule-based guide to covered calls and calendar LEAPS spreads.

From the Inside Flap

In this one-of-a-kind “how-to” guide, Joseph Hooper and Aaron Zalewski provide step-by-step instructions for generating large monthly cash returns from almost any stock investmentwhile at the same time decreasing the risk of stock ownership. Debunking conventional wisdom on every page, the authors turn traditional stock investment philosophy on its headno more reliance on rising markets to grow a portfolio, no more stock picking, and no more “stop losses.” In their revolutionary philosophy of “growth through cash flow,” Hooper and Zalewski (more…)

Real Estate Lease-Option Break Through

admin — Tue, 22 Dec 2009 17:52:52 +0000

One of today’s most profitable real estate investing tactics is using a combination of leases and options. Here’s how it works:You are an investor who buys and sells rental homes for profit. There are many ways to negotiate the purchase of a home. Of course, you can always make a purchase offer that includes your cash down payment coupled with a new mortgage loan.Even with low down payments few investors have enough cash to do more than one or two deals.No, it just not practical to tie up cash in each deal of you plan on buying 8 or 10 investment properties. These days many investors find a motivated seller who will listen to a more creative offer. The investor explains why it is in the seller’s best interest to lease the home to the investor with an option to buy in some set period of time. Often the term of the purchase option will be from 1 to 5 years.At some point the investor will want to sell a property to get to the cash profit. One of the ways to sell a home for top dollar is to sell it on a lease with option to purchase. Often the investor can offer a buyer with weak credit the opportunity to buy a home when no one else will.Because the buyer has a low credit rating the investor is entitled to a little more profit for taking the risk. This enables the investor to price the home 10% or 15% above market value and get a monthly payment 10% or 15% above normal.The buyer is happy. They are able to own a home and begin building equity. The investor is happy. He makes a greater profit and the tenant/buyer treats the home as if they own it… as they can within a few months.Often the trick is to find a buyer who is worthy of such a deal. Eureka! There is now a service, LeasePurchaseLeads found on the internet, that has list of tenant/buyers that are motivated, ready to move, already have a down payment, understand how a lease purchase works, and are serious about moving in?To narrow it down even further, the tenant/buyers on the LeasePurchaseLeads list tell you exactly what kind of house they need, and where it needs to be. The investor then looks the list over and selects the ones with the highest down payment, and/or the ones that are ready to move right now looking for a home like the investor’s. There’s no fee to join the service and no fee to look over the list of potential lease option buyers. The investor only pays a nominal fee to get the name and phone number of anyone on the list that seems to be an ideal buyer.If you’ve ever had to spend time search for suitable lease option buyers you’ll recognize the value of this service. It will cut your vacancy time factor way down.Long live the lease option strategy!

Options Trading and Risk

admin — Tue, 15 Dec 2009 05:33:22 +0000

Is options trading risky? This is one of the most popular questions that options trading beginners ask. In fact, my clients ask me this same question all the time. I would then ask them “What do you mean by risky?”. The usual answer would be “Can I lose a lot of money in options trading?”.
At least this brings us somewhere. Asking if options trading is risky without a clear idea what risk is in the first place gets nobody anywhere.
Risk is defined in many different ways to different people and for most people, risk is simply an expression of their fear of losing money. Whenever I am asked by an options trading beginner if options is risky, I know what they are really telling me is that they don’t want to lose money. How can we address this “risk” then?
Even though there are many ways to define risk in the financial sense, I think my 2 parts explanation caters best to the needs of the common retail investor. In my 2 parts explanation, risk in options trading for common retail investors are made up of; 1, Probability of Loss. 2, Consequence of Loss.
It’s like crossing a street. The probability of death is small but the consequence of death is catastrophic. However, because the probability is so small, we continue to do it every day.
In stock trading, you cannot really control the probability of loss because you win only if the stock goes up. That is why stock traders reduce the consequence of loss by having sensible stop loss in place.
See how the probability of risk and the consequence of risk interact with each other now?
The good news about Options Trading is that you get to control both the probability of risk and the consequence of risk! If you can control both elements of risk, won’t options trading actually be less risky than stock trading?
Options trading reduces the probability of risk through options strategies that profit from more than one direction. In fact, there are options strategies that profit when the stock goes up, down and sideways all at once! When you can profit in so many different directions all at once, won’t your probability of risk be dramatically reduced? An example of such an options strategy is the Call Ratio Spread which makes a profit if the stock goes up to a certain limit, stay stagnant or go down endlessly.
Options trading (http://www.optiontradingpedia.com) reduces the consequence of risk through leverage. Leverage cuts both ways. If you abuse leverage and buy options like you buy stocks, then you are in big trouble. However, if you use only money you can afford to lose in each options trade and make use of its leverage to produce the same returns that you would if you have bought the stocks instead, won’t the consequence of risk always be within your acceptable limit? An example of this is the Fiduciary Call options trading strategy.
Since the probability of risk and the consequence of risk can be dramatically lower in options trading than in stock trading, is options trading still “risky”?
Risk can be defined in many ways and options trading is inherently risky due to its nature as a leveraged derivative instrument. However, with sensible control of the probability and consequence of risk, your options trading experience may be a lot less “risky” than you think. Options trading becomes “risky” when you lose control over these 2 critical elements.

Strategies for put and call option trading (Paperback)

admin — Tue, 01 Dec 2009 17:39:55 +0000

No description for this product could be found, but have a look over at Amazon for reviews and other information.

Option Trading Explained – In Layman Terms

admin — Wed, 25 Nov 2009 06:13:48 +0000

Robert Kiyosaki says that Option Trading is the investment of the rich.
Indeed, option trading is the most versatile form of investment in the world today. Its versatility has been the topic of many speakers all over the world. Terms such as “Covered Calls” and “Credit Spreads” have become well known amongst traders new and veteran alike.
Option Trading Explained – Simply put, it is the trading of option contracts on a particular stock.
Options Explained – A contract that allows you to sell or buy a stock at a predetermined price within a set time frame.
There is enough material written explaining the technical make up of an option and I shall not dwell into it further in this writing. The purpose of this writing is to explain to you what the effects of option trading is. … let’s go into Option Trading Explained!
Option Trading Explained – What Can Stock Options Do?
Let us first examine the effects of this thing called stock options. Knowing all the effects of stock options allows us to better understand why it is such a celebrated investment tool and also why so many people go bust doing it. Let’s start from the Positive Effects of stock options.
Stock Options are:
Leverage. It allows you to control more shares (100 shares per option) with the same amount of money thereby exponentially increase your returns per dollar.
Discount. Just as you control more shares with just one option, you will then be able to control the same amount of shares with lesser money than before.
Protection. It allows you to protect the stock you hold by owning the right to sell them at a predetermined price no matter what happens.
Regardless of market direction. It allows you to profit from both upward and/or downward moves in the stock.
Creative. It allows you to put different types of options together to form all sorts of investment positions. It can even make money no matter which way the market goes.
And the Negative Effects are:
No value beyond expiration. You can potentially lose all your money along with the expiration of the option.
Negative Leverage. Just like it can amplify your gains, options will also amplify your loses.
Time Decay Effect. Options reduce in value over time and sometimes can completely obliterate any gains from movement in the underlying stock.
Looking at the above effects, it is clear that Option Trading indeed is an extremely versatile investment tool that allows its investor to profit from any market direction, protect his/her stock positions, reduce capital commitment and lots more, based on the way it is utilized.
Conversely, once such power of leverage is being abused, the investor could then lose everything he/she have put in by expiration or lose more from the same stock move than he/she is comfortable with. Also, by holding on to Options, time decay sometimes can obliterate your profits if the movement in the underlying stock is not big enough.
Therefore, investing in options requires careful planning on the part of the investor. You must know for what effect are you using options for and how much you are putting at risk. In essence, using options for Leverage confers the highest risk and the highest rewards and demands that you use only proven strategies with a proven track record.
Using options creatively even allows us to structure investment positions to reap a fixed monthly return that beats the market regardless of which way the market goes! Just like in the Ride the Flow System offered at http://www.mastersoequity.com/MOE_ridetheflow.htm . Where your capital can be fully protected no even if the market enters a severe drop. Sounds amazing?
Option Trading Explained – Conclusion
I hope this “Option Trading Explained” has given you a good overview of the effects of options.
For a full and complete education in option trading, please visit http://www.mastersoequity.com/OptionUni.htm

Rich Options Trading, Poor Options Trading

admin — Mon, 23 Nov 2009 14:40:26 +0000

After reading the book “Rich Dad Poor Dad” by Robert Kiyosaki, I came to realize that not only is there a rich and poor path in life but also a rich and poor path in options trading as well. Many options traders experience defeat in their options trading career, especially during the first few months, because they are unknowingly walking down the poor path in options trading. There are many differences in the approach winners take in options trading versus the losers and we shall outline and explore some of these in this article.Rich Options Trading :
1. Speculative directional options trading using direct call or put options buying only with a small percentage of their fund and only on the stocks with the best chances.
2. Extensive use of Option Greeks in order to dynamically hedge a position when conditions change.
3. Always doubt one’s own conclusions and make provisions for losses.
4. Always have a stop loss policy already in place or in mind. Stop loss points can be in the form of contingent orders or trailing stop orders.
5. Understands the exact options trading style that suits them. Emotional options traders should stay out of day trading.
6. Know that there is no one best way to trade every single situation.
7. Do not chase after profitable trades that have been missed earlier on.
8. Satisfied with a steady, consistent gain.
9. Into options trading for the long run.
10. Think options trading education for a start.
11. “Trades” the market.
12. Keeps a trading log.
13. Learn from mistakes.
14. Understands technical and fundamental analysis.Poor Options Trading :
1. Speculative directional options trading using direct call or put options buying with all their money hoping to hit a “big one” on stock picks taken from the TV or non-professional friends.
2. Has no idea what option greeks are at all.
3. 100% confidence! Full steam ahead!
4. Realize it’s too late only when it’s too late.
5. Follow whatever options trading style that is supposed to produce extra-ordinary gains only to completely break the rules and your pocket.
6. Stick to only one way of options trading for all market conditions and situations.
7. Missed a trade, watched the price go up and then enters it at that new high price only to see prices tumbling like a rock thereafter.
8. Always looking for ways to make more explosive gains from stock options only to have the dynamite eventually exploding in their face.
9. Start options trading with the purpose of quitting after hitting a big profit.
10. Think money making for a start.
11. “Plays” the market.
12. Forgets the last trade made.
13. Hates mistakes and tries to forget mistakes.
14. Mystifies and follows technical analysis superstitiously.
Well, as you can see from the list of differences above, the difference between rich options trading and poor options trading is not only a matter of technique or method but also a matter of attitude and mental approach. Only when the right mind meets the right technique does rich options trading happen. Are you making any of the mistakes that poor options trading makes?