No-Hype Options Trading: Myths, Realities, and Strategies That Really Work Book

Acknowledgments.

Introduction.

PART 1 The Foundations of Options Trading.

Chapter 1: Option Basics.

Definitions of Calls and Puts.

Are You Long Or Short?

Option Contract Size.

Is My Option In- or Out-of-the Money?

Option Trade Orders.

Option Expiration.

LEAPS Options.

Option Settlement

Options Cycles.

CHAPTER 2 Probability Distributions.

The Gaussian Distribution.

Application to the Real World.

Risk-Adjusted Returns.

High-Probability Trading.

Low-Probability Trading.

Options Trading Myths.

What is a “Conservative” Trade?

Exercises.

CHAPTER 3 Options Pricing and Implied Volatility.

The Black-Scholes Pricing Model.

The Greeks.

Implied Volatility.

Building the Price of an Option.

A Closer Look at the Greeks.

How Will We Use the Greeks?

Exercises.

CHAPTER 4 Vertical Spreads.

Building the Vertical Spread.

Effects of Implied Volatility.

Early Exercise.

Expiration and Exercise.

Margin Requirements.

Application of Probability Calculations.

Risk/Reward and Probability of Success.

Exercises.

PART 2 Options Strategies for Income Generation.

CHAPTER 5 Using Options to Boost Income in a Stock Portfolio.

The Classic Covered Call Strategy.

Strategic Considerations.

The Notorious Selling Naked Puts Strategy.

Selling Naked Puts for Income.

Buying Stocks at a Discount.

Combining the Covered Call with Selling Naked Puts.

Early Exercise.

Risk Management.

The Achilles' Heel of Directional Strategies.

Exercises.

CHAPTER 6 Calendar and Double Calendar Spreads.

Vega Risk and Calendar Spreads.

Volatility Skews.

Searching For Calendar Candidates.

Entering and Managing the Trade.

Early Exercise.

Adjustments.

Out-of-the-Money Calendar Spreads.

Double Calendar Spreads.

Determining the Optimal Strike Prices.

Trade Management and Adjustments.

Multiple Calendar Spread Positions.

Exercises.

CHAPTER 7 Double Diagonal Spreads.

Diagonal Spreads.

Double Diagonal Spreads.

Managing the Trade.

Double Diagonals vs. Double Calendars.

Exercises.

CHAPTER 8 Butterfly Spreads.

At-the-Money and Out-of-the-Money Butterfly Spreads.

Iron Butterfly Spreads.

The Broken Wing Butterfly.

Margin Requirements.

Trade Management.

Closing Butterfly Spreads.

Exercises.

CHAPTER 9 Condor Spreads..

The Basic Condor Spread.

The Opportunistic Model.

The Insurance Model.

Iron Condor Spreads.

Vega Risk and the Iron Condor.

The Short-Term Iron Condor.

The Long-Term Iron Condor.

Capital Management.

Risk Management.

Adjustment Techniques.

Adjustment Pros and Cons.

Adjustment Case Studies.

Managing the Iron Condor with the Greeks.

Advanced Adjustment Techniques.

Iron Condor Trading Systems.

Butterflies and Condors Are Cousins.

Delta Neutral Trading Strategies.

Exercises.

CHAPTER 10 Delta-Neutral Trading Strategies.

Risk Management Systems.

Challenging Markets for the Delta-Neutral Trader.

Two Distinct Trading Philosophies.

The "Secret" of Success.

CHAPTER 11 Make Your Trading a Business.

Getting Started.

Managing Losses.

The Trading Plan.

Money Management.

The Psychology of Trading.

Living with the Two-Headed Monster.

Required Tools for This Business.

What's Next?

Appendix: Answers to the Chapter Exercises.

Glossary.

Index.