Butterfly Option Strategy » Options

Option Trading: Thinking Outside the Box! Intermediate To Advanced Futures Options Strategies! A+ (Kindle Edition)

admin — Sat, 31 Jul 2010 17:29:54 +0000

“Who Else Wants To Put Themselves Through An Exclusive, Top Secret Training Program, Developed By An Ex-Trader From One Of The World’s Largest Grain Trading Companies That Can Instantly Transform Your Commodity Option Trades Into Pure Gold, While Minimizing Risks And Losses To The Lowest Possible Level?” There are many futures options techniques that can be profitable. They can range from buying and selling options based on volatility to trading ratiobackspreads based on the technical analysis of the underlying futures market.One way is to trade spreads that can profit from time decay. You can sell options which you believe will lose more time value than the options you buy.The key is to find techniques that have an advantage when you put the trade on. What I will discuss are futures options trades that have this advantage.Trades that have a special quality that you can spot before you enter into it. You will be able to see what options are cheaper or more expensive co (more…)

The Options Trading Body of Knowledge: The Definitive Source for Information About the Options Industry [Hardcover]

admin — Fri, 16 Jul 2010 18:45:12 +0000

“The author has written a truly complete reference book on options trading, from basics to strategies to taxes and theory. Newcomers to options can quickly find a clear explanation of terms or strategies they aren’t familiar with, and experienced traders can expand their understanding of how complex strategies are created.” –Jim Bittman, author, Trade Options Like a Professional “For a new perspective about options, I recommend Michael Thomsett’s comprehensive The Options Trading Body of Knowledge. Traders at all levels will enjoy his easy-to-read style as he explains options from A to Z. The options industry has needed a reference like this for a long time.” –Marty Kearney, Senior Staff Instructor, The Options Institute The Comprehensive, Up-to-Date Reference for Every Options Trader By Michael C. Thomsett, author of the global best-seller Getting Started in Options Illuminates virtually every technique and form of options trading–incl (more…)

Understanding Advanced Option Strategies – A Simplified Guide to Trading Stock Options (Kindle Edition)

admin — Thu, 01 Jul 2010 22:47:50 +0000

Go beyond the basics, and learn about Advanced Option Trading Strategies. Learn about Call and Put Spreads, Option Straddles, and Option Strangles with Option Maestro’s Advanced Option Trading Strategies E-Book. Learn easily with step-by-step examples. 100% Money Back Guarantee!

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Advanced Options Trading: The Analysis and Evaluation of Trading Strategies Hedging Tactics and Pricing Models [Hardcover]

admin — Mon, 28 Jun 2010 23:41:16 +0000

This book thoroughly explains the options markets. Moreover, the work contains several unique features, including computer codes to calculate changes in options properties and a historic evaluation of options strategies and pricing theories. As a result, traders learn what works and what doesn’t work. Specific features include: Exotic options; The factors influencing option pricing; Advanced trading strategies such as spreads and straddles; The importance of delta, gamma and theta; Risk management with options.

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Advanced Options Trading: Approaches, Tools, and Techniques for Professionals Traders [Hardcover]

admin — Fri, 25 Jun 2010 14:55:45 +0000

As an active trader in today’s market, you are faced with unprecedented challenges. Dramatic price swings in equity, debt, and currency have made it tougher than ever to manage and trade risk. But with great risk, of course, comes great opportunity— and Advanced Options Trading delivers a detailed system for successfully trading options in a highly volatile and unpredictable global market. Noted options educator and owner of his own brokerage house, Kevin M. Kraus explains the best practices for using options to capture premium, reduce equity purchase prices, manage the costs of buying options, and control portfolio risk—critical skills for finding steady profits in our ever-shifting economic landscape. He offers a close examination of the nature of volatility and what it means for investors, whether they’re just getting started or are veterans of the options market. Advanced Options Trading covers:T (more…)

Spread Trading: An Introduction to Trading Options in Nine Simple Steps (Wiley Trading) (Hardcover)

admin — Thu, 14 Jan 2010 15:22:37 +0000

A proven,easy-to-understandmethod for makingmoney with options “If you’ve never invested in the stock market,this is the book for you. If you’ve been investingfor years . . . this is still the book for you. A fantastic introduction to options.” —Jon “DOCTOR J” Najarian, Co-founder, OptionMonster.com Spread trading-the practice of combining optiontrades and adjusting them over time-is being used successfullyby more and more professional traders. In this book, Greg Jensenshows nonprofessionals the tremendous advantages thissafe and profitable method offers. In simple and precise terms, Spread Trading providesreaders with all the essential tools to begin trading options.It explains, in nine simple steps, the basics of puts, calls,strike prices, and spreads-assuming no prior knowledge onyour part-and tells how to profit no matter what the market does.The author has helped thousands of people achieve successimplementing this approach, and with Spre (more…)

Trend Following and Mean Reversion Strategies With Bollinger Bands

admin — Wed, 13 Jan 2010 02:49:28 +0000

Bollinger Bands are a very useful indicator developed by John Bollinger based on a moving average and standard deviations. There are four parts to Bollinger Bands:
1. Moving Average: By default, a 20-period simple moving average is used.
2. Standard Deviations: A measure of the volatility of the price series.
3. Upper Band: The upper band is usually 2 standard deviations (calculated from 20-periods of closing data) above the moving average.
4. Lower Band: The lower band is usually 2 standard deviations below the moving average.
At 2 standard deviations, Bollinger Bands should contain 85% of the movement of the instrument being measured. The higher the number of standard deviations used will make it so that even more of the price data is contained in the bands. Conversely the smaller the number of standard deviations used will result in less price data in the bands.
Knowing that you can see how these can be used in several ways, a few of which we will mention here. For stock trading the two most used strategies using bands are breakout and mean reversion trading.
Breakout-Since roughly 85% of a securities price action is contained in the bands many traders see a movement outside of the bands as a significant sign that something is happening whether it be an earnings announcement, buyout, or just a big move in the sector or market. So if the stock hasn’t been moving too much and then breaks up above the upper band they would consider buying it (You would do the opposite if it broke down below the lower band). A simple breakout strategy would be to buy (or short) when a security closes above (or below) the upper (or lower) band and exit when it closed below (or above) its moving average.
Mean Reversion-Since approximately 85% of a stocks price action is contained in a 2 standard deviation Bollinger Band another way to use them is to sell or sell short when a stock gets to the upper band and buy when it gets to the lower band.
As you can tell there are several ways to use Bollinger Bands. For instance you could take the mean reversion strategy and overlay a Bear Call Spread/Bull Put Spread strategy over it by selling a slightly out of the money call and buying the next strike up when the stock pierces the upper band and doing the opposite (sell the slightly out of the money put and buy the next strike down) when it pierces the lower band. This is but one of many variations of trading strategies where Bollinger Bands can come in useful.

Trading Option Spreads: How to Increase Returns and Lower Risks with Options Strategies (Hardcover)

admin — Mon, 11 Jan 2010 22:58:32 +0000

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

Options Trading and Risk

admin — Sun, 10 Jan 2010 03:41:53 +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.

Advanced Options Trading (Kindle Edition)

admin — Tue, 05 Jan 2010 19:47:33 +0000

As an active trader in today;s market,you are faced with unprecedented challenges. Dramaticprice swings in equity, debt, and currency havemade it tougher than ever to manage and trade risk.But with great risk, of course, comes great opportunity;and Advanced Options Trading delivers adetailed system for successfully trading options in ahighly volatile and unpredictable global market.Noted options educator and owner of his ownbrokerage house, Kevin M. Kraus explains the bestpractices for using options to capture premium,reduce equity purchase prices, manage the costs ofbuying options, and control portfolio risk;criticalskills for finding steady profits in our ever shiftingeconomic landscape. He offers a close examinationof the nature of volatility and what it means forinvestors, whether they ;re just getting started orare veterans of the options market. Advanced Options Trading covers:The critical nature of forward-lookingimplied volatility. Ways to level the volatility (more…)