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Options Made Easy: Your Guide to Profitable Trading, 2nd Edition

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Options Made Easy: Your Guide to Profitable Trading, 2nd Edition

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Description

  • Copyright 2006
  • Dimensions: 7x9-1/4
  • Pages: 368
  • Edition: 2nd
  • Book
  • ISBN-10: 0-13-187135-8
  • ISBN-13: 978-0-13-187135-9
  • eBook (Watermarked)
  • ISBN-10: 0-13-204529-X
  • ISBN-13: 978-0-13-204529-2

In Options Made Easy, Second Edition, Guy Cohen clearly explains everything you need to know about options in plain English so that you can start trading fast and make consistent profits in any market, bull or bear!

Simply and clearly, the author reveals secrets of options trading that were formerly limited to elite professionals–and exposes the dangerous myths that keep investors from profiting.

As you set out on your options journey, you'll learn interactively through real-life examples, anecdotes, case studies, and pictures. Guy Cohen is your friendly expert guide, helping you pick the right stocks, learn the right strategies, create the trading plans that work, and master the psychology of the winning trader.

  • Master all the essentials–and put them to work

    Options demystified so that you can get past the fear and start profiting!

  • Learn the safest ways to trade options

    Identify high-probability trades that lead to consistent profits

  • Design a winning Trading Plan–and stick to it

    Understand your risk profile and discover exactly when to enter and exit your trades

  • Choose the right stocks for maximum profit

    Screen for your best opportunities–stocks that are moving–or are about to move

  • Discover the optimum strategies for you

    Match your trading strategies to your personal investment goals

  • No bull! The realities and myths of the markets

    What you must know about fundamental and technical analysis

Sample Content

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Table of Contents

Acknowledgments.

About the Author.

Executive summary.

Preface.

1. Introduction to Options.

2. Into the Marketplace.

3. The Basics of Fundamental Analysis.

4. The Basics of Technical Analysis.

5. Two Popular Strategies and How to Improve Them.

6. An Introduction to the Greeks.

7. Bull Call Spreads and Bull Put Spreads.

8. Two Basic Volatility Strategies.

9. Two Basic Sideways Strategies.

10. Trading and Investing Psychology.

11. Putting It All Together-A Call to Action.

12. Stock Futures and Options Strategies (Bonus Chapter).

Appendix I: Strategy Table.

Appendix II: Glossary.

References and Recommended Reading.

Index.

Index

Untitled Document Download the Index file related to this title.

Updates

Errata

PrintNumber ErrorLocation Error Correction DateAdded
1 pii FT page outdated fixed 3/14/2008
1 piii new logo and paragraph fixed 3/14/2008
1 piv new logo and printing fixed 3/14/2008

p36 3rd bullet point, 3rd line: ...strike price of 40, 140, 240, 340, and so on. ...strike price of 10, 110, 210, 310, and so on. 3/14/2008
1 p47 2nd sent: The option price has risen from $1 to $5 - this is an increase of 500%. The option price has risen from $1 to $5 - this is an increase of 400%. 3/14/2008
1 p67 Last equation on page:
($42.00 -4)+ ($40.00x1)/5 = $41.60
($42.00 x 4) + ($40.00 x 1)/5 = $41.60 3/14/2008
1 p112 Chart 4.5.1 Bar above 45.00 should have an “A” above it. fixed 3/14/2008
1 p112 Elliott Wave Summary: I strongly recommend that you learn more about this by looking at The Market Matrix at www.themarketmatrix.co.uk. I strongly recommend that you learn more about this by looking at Dynamic Trading by Robert Miner at www.dynamictraders.com 3/14/2008
1 p115 Diagram 5.1: Buy put image wrong, should look like Long put image on p293. fixed 3/14/2008
1 p154 Under Risk: [call premium received] - [put premium paid] + [stock price paid - put strike price] [put premium paid - call premium received] + [stock price - put strike] 3/14/2008
1 p161 Table, Strategy: Buy put image wrong, should look like Long put image on p293. fixed 3/14/2008
1 p169 2nd bullet point: your options will increase by $5.00, and you’ll make $500 in profit, a profit of more than 170%. your options will increase by $5.00, and you’ll make $500 in profit, a profit of more than 70%. 3/14/2008
1 p193 Example 6.4.2: Let’s take HP on May 1, 2001. The stock price is $49.40 and we’ll look at the December 2001 $50 strike calls and puts, which are priced at $7.50 and $6.90 respectively. Staying with our Microsoft example where the stock price is $69, let’s look at the January 2002 $70 strike calls and puts respectively. 3/14/2008
1 p207 Chart 7.4 moves to p208. ALL text from p219 is the rest of footnote and should be on this page. fixed 3/14/2008
1 p219 ALL text from this page should be the footnote on p207. Added text: I emphasize that the above comparison is shown toillustrate that we do not do credit spreas that are In the Money. Therefore, the Bull Put spread in this exsample is something we would never even consider. fixed 3/14/2008
1 p255 Condor with Calls, Step 1: Sell 1 lower strike (ITM) call Buy 1 lower strike (ITM) call 3/14/2008
1 p255 Condor with Calls, Step 3: Buy 1 higher middle strike (OTM) call Sell 1 higher middle strike (OTM) call 3/14/2008
1 last page Ad updated fixed 3/14/2008
9 pii FT statement moved to p348 fixed 3/14/2008
9 piii FT Press logo and paragraph removed fixed 3/14/2008
9 piv Vice President and Editor-in-Chief: Tim Moore Vice President, Publisher: Tim Moore 3/14/2008
9 piv Added text Associate Publisher and Director of Marketing: Amy Neidlinger 3/14/2008
9 piv FT Press logo removed fixed 3/14/2008
9 pvii page numbers right aligned and leader points added fixed 3/14/2008
9 p23 Selling a put option obliges you to buy the underlying asset to the option buyer. Selling a put option obliges you to buy the underlying asset from the option buyer. 3/14/2008
9 p22 Your reward is potentially unlimited. Your reward is potentially unlimited until the stock falls to zero. 3/14/2008
1 p175 Mathematically speaking, gamma is the second derivative of delta. Therefore, if delta is a measure of speed, gamma is a measure of acceleration. Unlike the other Greeks, gamma is not a measure of the option price versus another parameter, but rather a measure of how delta moves against changes in the stock price. Mathematically speaking, gamma is the first derivative of delta. Therefore, if delta is a measure of speed, gamma is a measure of acceleration. Gamma can be seen as the acceleration of the option price versus the underlying asset price, or as the speed of delta versus the underlying asset price. 5/14/2008
1 p294 Cover Put image updated

fixed 5/14/2008
1 p302 Diagonal Put image updated

fixed 5/14/2008
11 p81 PE Ratio < 30%

PE Ratio < 30 9/4/2008
11 p147 What would happen if we had written the $25.00 strike call when BORT was trading at $28.20? What would happen if we had written the $25.00 strike call when BORT was trading at $28.10? 9/4/2008
11 p154 [put premium paid - call premium received] + [stock price - put strike] [stock price + put premium - put strike price - call premium] 9/4/2008
11 p248 Chart 9.1.3b FRE Long Call Butterfly risk profile (wide). Chart 9.1.3b FRE Long Put Butterfly risk profile (wide). 9/4/2008

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