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Options Made Easy: Your Guide to Profitable Trading, 2nd Edition
- By Guy Cohen
- Published Jul 18, 2005 by FT Press.
- 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
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Product Author Bios
Guy Cohen is the author of the best-selling trading books: Options Made Easy and The Bible of Options Strategies. He has extensive experience in the options and stock markets and his clients include NYSE Euronext, the largest stock exchange in the world. Guy is also the creator of trading products Flag-Trader, OptionEasy, and Illuminati-Trader. Specializing in trading applications Guy has developed comprehensive trading and training models, all expressly designed for maximum user-friendliness. An entertaining speaker, Guy has an MBA (Finance) from City University Cass Business School, London.
© Copyright Pearson Education. All rights reserved.
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.
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Master all the essentials–and put them to work
Options demystified so that you can get past the fear and start profiting!
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Learn the safest ways to trade options
Identify high-probability trades that lead to consistent profits
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Design a winning Trading Plan–and stick to it
Understand your risk profile and discover exactly when to enter and exit your trades
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Choose the right stocks for maximum profit
Screen for your best opportunities–stocks that are moving–or are about to move
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Discover the optimum strategies for you
Match your trading strategies to your personal investment goals
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No bull! The realities and myths of the markets
What you must know about fundamental and technical analysis
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162 of 170 people found the following review helpful
Options Made TOO Easy, By Bryan "Bryan" (San Francisco, CA USA) - See all my reviews
This review is from: Options Made Easy: Your Guide to Profitable Trading (2nd Edition) (Hardcover)
First off, I want to say that I definitely didn't dislike this book. It's a solid introduction to options trading and it covers an awful lot of material. My issue with the book is that it tried to cover too many things by not fleshing out the details on many topics. As another reviewer pointed out, there are much better options (no pun intended) if you want to learn about fundamental or technical analysis. Frankly, depending on your time horizon, if you don't have an understanding of analysis of either kind you probably shouldn't even think about trading options. But back to the book; I do wish it had more on options trading strategies. Explanations of the vertical spreads are good, but then there's just a long 'strategy table' in the back that glosses over strangles, butterflies, condors, backspreads, etc. without providing any meaningful detail on how they should be used. Topics like volatility, essential to understanding premiums, are also touched on too lightly. I don't...
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100 of 105 people found the following review helpful
A good addition to the investing library, By
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This review is from: Options Made Easy: Your Guide to Profitable Trading (2nd Edition) (Hardcover)
While this book does a good job in explaining several common option techniques, the title is somewhat misleading as I don't think a subject as complicated as options trading can ever be "made easy." Reading the book is much like reading a text book or an owner's manual. The author does a good job in boiling down the strategies to their essence and presents them in multiple ways so that people who learn graphically instead of by reading can pick up the strategies easier. The book's shortfall is that it spends a lot of time discussing investment basics such as fundamental analysis and technical analysis. While those are certainly important, I would have preferred that more time been spent on discussing different options strategies because if a person doesn't already know a fair amount about analyzing stocks he has no business trading options in any event. Still, I view this as a handy reference tool and expect that I will refer to it regularly. It is the best book on the subject...
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56 of 59 people found the following review helpful
Absolutely Outstanding!!, By
This review is from: Options Made Easy: Your Guide to Profitable Trading (2nd Edition) (Hardcover)
I didn't know anything about options, and had come to Amazon to find a book that I could read that would cover the basics and hopefully go over practical trading strategies that a novice could execute. Well, I read the customer reviews on this book, at the time 9 reviews, all 5 out of 5.I'm very glad I bought the book! The author covers the basics of options in a very clear, concise and easy to follow way. The author also covers a lot of option trading strategies, and discloses how he trades. The examples are excellent, and easy to follow. The author also goes over the myths associated with options, and also the pitfalls (i.e. buying options with 1 month left to expiry, like a lot of option newsletters seem to recommend but he certainly does not, quite the opposite). If you want to read up on options, you can't go wrong with this book. |
Index
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.
Downloadable Sample Chapter
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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