Tài liệu The Options Course Workbook Second Edition ppt

The

Options

Course

Workbook

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Founded in 1807, John Wiley & Sons is the oldest independent publishing

company in the United States. With offices in North America, Europe, Aus￾tralia, and Asia, Wiley is globally committed to developing and marketing

print and electronic products and services for our customers’ professional

and personal knowledge and understanding.

The Wiley Trading series features books by traders who have survived

the market’s ever changing temperament and have prospered—some by

reinventing systems, others by getting back to basics. Whether a novice

trader, professional, or somewhere in-between, these books will provide

the advice and strategies needed to prosper today and well into the future.

For a list of available titles, visit our web site at www.WileyFinance.com.

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The

Options

Course

Workbook

Second Edition

Step-by-Step Exercises and

Tests to Help You Master

The Options Course

GEORGE A. FONTANILLS

John Wiley & Sons, Inc.

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Copyright © 2005 by George A. Fontanills and Richard Cawood. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted

in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or

otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright

Act, without either the prior written permission of the Publisher, or authorization through

payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc.,

222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the web at

www.copyright.com. Requests to the Publisher for permission should be addressed to the

Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030,

201-748-6011, fax 201-748-6008.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their

best efforts in preparing this book, they make no representations or warranties with respect

to the accuracy or completeness of the contents of this book and specifically disclaim any

implied warranties of merchantability or fitness for a particular purpose. No warranty may

be created or extended by sales representatives or written sales materials. The advice and

strategies contained herein may not be suitable for your situation. You should consult with a

professional where appropriate. Neither the publisher nor author shall be liable for any loss

of profit or any other commercial damages, including but not limited to special, incidental,

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For general information on our other products and services, or technical support, please

contact our Customer Care Department within the United States at 800-762-2974, outside

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For more information about Wiley products, visit our web site at www.wiley.com.

ISBN 0-471-69421-5

Printed in the United States of America.

10 9 8 7 6 5 4 3 2 1

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To our global community

that we may strive to create

a peaceful world

for all our children.

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Contents

CHAPTER 1 Options Trading: A Primer 1

CHAPTER 2 The Big Picture 9

CHAPTER 3 Option Basics 31

CHAPTER 4 Basic Trading Strategies 53

CHAPTER 5 Introducing Vertical Spreads 67

CHAPTER 6 Demystifying Delta 79

CHAPTER 7 The Other Greeks 87

CHAPTER 8 Straddles, Strangles, and Synthetics 100

CHAPTER 9 Advanced Delta Neutral Strategies 116

CHAPTER 10 Trading Techniques for

Range-Bound Markets 129

CHAPTER 11 Increasing Your Profits

with Adjustments 141

CHAPTER 12 Choosing the Right Broker 149

CHAPTER 13 Processing Your Trade 159

CHAPTER 14 Margin and Risk 170

CHAPTER 15 A Short Course in

Economic Analyses 181

vii

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CHAPTER 16 Mastering the Market 188

CHAPTER 17 How to Spot Explosive Opportunities 194

CHAPTER 18 Tools of the Trade 212

CHAPTER 19 Final Summary 218

viii CONTENTS

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The

Options

Course

Workbook

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CHAPTER 1

Options

Trading:

A Primer

SUMMARY

Starting to trade options can be stressful and unsettling, but it doesn’t have

to be. By learning to trade options systematically and by fostering a patient

approach, a new trader can become successful. Options trading requires

an understanding of the characteristics of options and this takes time to

master. Nonetheless, a person who is willing to study and work hard can

achieve success.

To become successful at trading options, you need to focus on three

important features of options: duration, direction, and magnitude. If un￾derstood, the interrelation of these three issues can provide the edge

needed to win at options trading. There are, however, some stepping￾stones that need to be put in place before jumping headlong into the op￾tions game. Following the suggestions in this book will enable you to

gain the knowledge and skills necessary to trade profitably. Mainly, a

new trader should start small, not placing too much capital in any one

trade initially. New traders should also paper trade strategies to get a

better feel for how each strategy works. Any trader, new or experi￾enced, should define the risk before entering any trade. Only consistent

risk managers make it in the trading profession; so do your homework

and follow the steps outlined in this book.

1

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QUESTIONS AND EXERCISES

1. True or False: Just because someone is licensed to place a trade does

not mean the person has the knowledge to invest your money wisely.

2. What is the difference between an investor and a trader?

____________________________________________________________

____________________________________________________________

____________________________________________________________

3. Successful options traders use only ________________ that are read￾ily available and can be invested in a sound manner.

A. Options.

B. Funds.

C. Futures.

D. Stocks.

4. It is critical to accurately assess your ______________ to determine

the style of investing that suits you best.

A. Flexibility.

B. Interest.

C. Markets.

D. Time constraints.

5. How can you minimize your losses when you first begin trading

options?

A. Start small.

B. Learn to paper trade.

C. Interview several brokers before picking the one most suited to

your needs.

D. All of the above.

6. What is the most important factor for building a low-stress invest￾ment strategy?

A. Understanding your markets.

B. Having a good broker.

C. Defining your risk in every trade.

D. Learning to paper trade first.

2 THE OPTIONS COURSE WORKBOOK

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7. ______________ allows a trader to cultivate a matrix of strategies

with which to respond to market movement in any direction.

A. Flexibility.

B. Specializing.

C. Computer access.

D. Confidence.

8. Successful investors usually ______________ in just one or in a few

areas. This allows them to develop strategies that work in certain

recognizable market conditions.

A. Specialize.

B. Win.

C. Go short.

D. Systematically invest.

9. To become a successful options trader you have to have

______________.

A. Lots of money to invest.

B. Patience and persistence.

C. A computer.

D. A good sense of market direction.

MEDIA ASSIGNMENT

The Internet is a great resource for new and experienced traders. Not only

can traders place trades online, but there is a plethora of free options in￾formation that can be easily accessed. For example, the Optionetics web

site has a wide range of information and numerous articles that can foster

profitable trading for both new and experienced traders. Take the time to

become familiar with the Optionetics site in order to benefit from the

tools and information found there. This is also a great starting point to

find a broker. The site offers a section dedicated to providing in-depth

information about the various options brokers out there. Take the time to

review this information so you’ll be prepared to open a brokerage account

when the time comes.

Options Trading: A Primer 3

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VOCABULARY LIST

SOLUTIONS

1. True or False: Just because someone is licensed to place a trade does

not mean the person has the knowledge to invest your money wisely.

Answer: True.

Discussion: Unfortunately, obtaining a license to place a trade does

not necessarily make someone a good trader. Like many things in life,

sometimes book knowledge isn’t enough to create success. When

learning to drive a car, someone doesn’t just immediately move out

onto the freeway after reading a book. Though having a license does

teach some important things, it isn’t a guarantee that the person will

be successful at trading.

2. What is the difference between an investor and a trader?

Answer: An investor takes a long-term, passive approach. A trader

takes a more active approach using various options strategies that

tend to capitalize on shorter-term market movement.

Discussion: As the term implies, an investor is investing his/her

money into a company by buying stock in it. A trader isn’t necessarily

concerned with ownership, just profits and short-term gains. Most in￾vestors are people who buy and hold stock or mutual funds; they are

more in step with the Warren Buffett approach to long-term security.

A trader seeks profits in the short term, trading stocks and options

4 THE OPTIONS COURSE WORKBOOK

Bear

Broker

Bull

Call

Capital

Delta neutral

Go long

Go short

Investor

Leverage

Paper trading

Put

Return

Risk

Risk management

Stop loss

Trader

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