Options Trading QuickStart Guide: The Simplified Beginner's Guide to Options Trading

By ClydeBank Finance

Options Trading, Made Simple

This is not your typical options trading book, plagued with jargon and written by Wall Street academics who are more concerned with showing off than with actually teaching you how to trade. In Options Trading For Beginners, ClydeBank Finance packages the wisdom of the Wall Street elite into a straight-forward and easy-to-read teaching tool. Options Trading For Beginners is ClydeBank Finance at its best, making complex ideas clear while endowing readers with a wealth of powerful new knowledge.

Whether you’re a newcomer to options trading or a grizzled veteran looking for a fresh take on basic strategy, you’ll enjoy the plain-spoken style and colorful scenarios illustrated in Options Trading for Beginners.

In addition to providing a solid beginner’s course in options trading, Options Trading for Beginners walks you through a multitude of strategic trading decisions, showing you how a trader thinks and how he arrives at critical decisions. This book wasn’t written for someone who wants to stay on the sidelines, but for the ambitious trader looking to become a formidable, sharp, and cunning options trader.

You’ll Learn:
- The fundamentals of put and call options
- How to understand and leverage intrinsic value
- How to use a stock’s IV (implied volatility) to inform smart trades
- What you need to know about “The Greeks'"
- The mechanics of the short sell

• Language: English
• Publisher: ClydeBank Media LLC
• Release date: Jun 1, 2016
• ISBN: 9781945051517

Book preview

Options Trading - Quick Start GuideOptions Trading - Quick Start Guide

Visit: www.clydebankmedia.com/investing-campus

Copyright © 2016 by ClydeBank Media - All Rights Reserved.

This document is geared towards providing exact and reliable information in regards to the topic and issue covered. The publication is sold with the idea that the publisher is not required to render accounting, officially permitted, or otherwise, qualified services. If advice is necessary, legal or professional, a practiced individual in the profession should be ordered.

From a Declaration of Principles which was accepted and approved equally by a Committee of the American Bar Association and a Committee of Publishers and Associations. In no way is it legal to reproduce, duplicate, or transmit any part of this document in either electronic means or in printed format. Recording of this publication is strictly prohibited and any storage of this document is not allowed unless with written permission from the publisher.

The information provided herein is stated to be truthful and consistent, in that any liability, in terms of inattention or otherwise, by any usage or abuse of any policies, processes, or directions contained within is the solitary and utter responsibility of the recipient reader. Under no circumstances will any legal responsibility or blame be held against the publisher for any reparation, damages, or monetary loss due to the information herein, either directly or indirectly. Respective authors own all copyrights not held by the publisher. The information herein is offered for informational purposes solely, and is universal as so. The presentation of the information is without contract or any type of guarantee assurance.

Trademarks: All trademarks are the property of their respective owners. The trademarks that are used are without any consent, and the publication of the trademark is without permission or backing by the trademark owner. All trademarks and brands within this book are for clarifying purposes only and are owned by the owners themselves, not affiliated with this document.

ClydeBank Media LLC is not associated with any organization, product or service discussed in this book. The publisher has made every effort to ensure that the information presented in this book was accurate at time of publication. All precautions have been taken in the preparation of this book. The publisher, author, editor and designer assume no responsibility for any loss, damage, or disruption caused by errors or omissions from this book, whether such errors or omissions result from negligence, accident, or any other cause.

Edition # 2 – Created : July 19, 2018

Editors : Marilyn Burkley and Patricia Guth

Cover Illustration and Design: Katie Poorman, Copyright © 2016 by ClydeBank Media LLC

Interior Design: Katie Poorman, Copyright © 2016 by ClydeBank Media LLC

eBook Design: Luca Funari, Copyright © 2016 by ClydeBank Media LLC

ClydeBank Media LLC

P.O Box 6561

Albany, NY 12206

Printed in the United States of America

ClydeBank MEDIA

Copyright © 2016

ClydeBank Media LLC

www.clydebankmedia.com

All Rights Reserved.

ISBN-13 : 978-1-945051-05-0

contents

INTRODUCTION

Why This Book Was Written

| 1 | OPTION BASICS

What are Options?

What are Stocks?

Options in the Stock Market

The Broker

The Market Maker

The Options Clearing Corporation

Options Industry Council

Why Were Options Such a Hit?

Options vs. Stocks

| 2 | TRADING FUNDAMENTALS

Calls and Puts—What’s in a Name?

Buying a Call Option on Exxon

Selling a Call Option on Disney™

Buying a Put Option on General Electric™

Selling a Put Option on McDonalds™

| 3 | A SOUND STRATEGY FOR A BEGINNER

Selling the Covered Call

Dumping MGM

In the Money (ITM) or Out of the Money (OTM)

Disclaimer

Avoid these Beginner Mistakes

Practice Makes Perfect

| 4 | KEY INFLUENCERS ON OPTIONS PRICES

Why You Should Care About How Options Are Priced

The Moneyness Factor

Time Value & Time Decay

Volatility

Interest Rates & Dividends

| 5 | WIN AT OPTIONS BY SPEAKING GREEK

Delta

Gamma

Theta

Vega

Rho

| 6 | POPULAR OPTIONS STRATEGIES

Straddling a Stock Using Options

The Strangle

A Bull (or Bear) Spread

Rolling Positions

CONCLUSION

GLOSSARY

ABOUT CLYDEBANK

BEFORE YOU START READING,

DOWNLOAD YOUR FREE DIGITAL ASSETS!

Visit the URL below to access your free Digital Asset files that are included with the purchase of this book.

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www.clydebankmedia.com/options-assets

introduction

Why This Book Was Written

Hunting for a good beginner-level book on options trading can be a very frustrating endeavor. Many of the books that are labeled introduction to... or ...for beginners are written by high-level brokers or academics who have an annoying habit of talking over their readers’ heads and diving headfirst into Wall Street jargon without taking the time to properly explain the basics.

On the flip side, since options trading is such a fertile niche for new ideas, every John Doe and his brother has written a book on options trading, and, unfortunately, an enthusiastic options trader doesn’t necessarily make a good writer. Advice from these writers can be not only confusing but also misleading and the results of following said advice can be alarming if not disastrous.

This book, however, was written with the goal of maximizing clarity and readability, all while providing an extensive look at the fundamentals of options trading. You should be more than ready to make your first few trades after reading this book.

| 1 |

Option Basics

Throughout this book, we’ll be talking about stock options. However, there are other types of options which you may delve into at a later time. Here’s a definition of each from the folks at optionstrading.org.

Stock Options: The underlying asset for these contracts is shares in a specific publicly listed company.

Index Options: These are very similar to stock options, but rather than the underlying security being stocks in a specific company it is an index – such as the S&P 500.

Forex/Currency Options: Contracts of this type grant the owner the right to buy or sell a specific currency at an agreed rate.

Futures Options: The underlying security for this type is a specified