Contents
Introduction
Chapter 1 Options are not assets, they are bets.
Chapter 2 Every option contract has a buyer and a seller; one is long, one is short, but which one has the best odds of winning?
Chapter 3 Strong trends are the friend of an option buyer and the enemy of an option seller.
Chapter 4 Time is an option seller’s friend, but the option buyer’s enemy. (theta)
Chapter 5 volatility is the option buyer’s friend but the option seller’s enemy. (vega)
Chapter 6 How much of the move do you get for the money? (delta)
Chapter 7 Stocks for rent: covered calls
Chapter 8 Selling lottery tickets: naked options
Chapter 9 Buying lottery tickets: deep out-of-the-money options
Chapter 10 Trends determine who wins: strangles and straddles
Chapter 11 The twins: every position has a synthetic relative
Chapter 12 Spreads: ratio, calendar, diagonal
Chapter 13 The wind beneath the pro’s wings: butterflies and condors
Chapter 14 Dealing with the behavioral problems of immature options
Chapter 15 A trader’s choices: insurance, stop losses, or ruin
Chapter 16 Your method, your rules, your edge
Appendix A: Relative time value of options based on the time to expiration of the contract
Appendix B: Odds and expected payout of selected option strategies
Appendix C: The relationship between option premiums, deltas, standard deviations, and profit probabilities
Appendix D: Time progression payout potential
Appendix E: Expanded table of synthetic positions
