Options Trading Body of Knowledge, The: The Definitive Source for Information About the Options Industry

Product Author Bios

Michael C. Thomsett has authored dozens of financial books, notably on the topics of options. These include Options Trading for the Conservative Investor (FT Press); Winning with Options (Amacom Books); The LEAPS Strategist (Marketplace Books); and the best-selling Getting Started in Options (John Wiley & Sons), now in its 8th edition with over 250,000 copies sold.

Thomsett is also author of The Investment and Securities Dictionary (McFarland), named by Choice Magazine as an Outstanding Academic Book for 1988, and many other investment and trading books. Before starting his professional writing career in 1978, Thomsett was an accountant. He also spent seven years as a consultant in the financial services industry with clients including securities broker/dealers, insurance master agencies, and insurance companies. He has been an active options trader since the mid-1970s.

Thomsett lives in Nashville, Tennessee, and writes full time.

“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--including options on futures and ETFs
• Helps you consistently choose the right options strategies and understand your true risks

Options offer investors multiple opportunities to enhance their profits. However, options trading is complex, and the sheer scope of available strategies can overwhelm traders. Today, options can support a wide range of strategies, from high risk to conservative. Moreover, options are available not only for stock equities but also for futures, indices, and mutual funds. To trade successfully, traders need an authoritative, up-to-date guide to all the strategies available to them. Now, renowned options expert and best-selling author Michael C. Thomsett has created the definitive reference for options traders at all levels of experience.

Thomsett systematically illuminates each key technique and strategy: how trades are structured, how to assess risk, and when each strategy is most applicable. For most strategies, Thomsett presents detailed tables and illustrations identifying profit zones, loss zones, and breakeven points.

This book thoroughly explains how option premium develops based on various elements of value, walks through the calculation of returns on options trading, discusses how federal taxation works in the options market, shows how stocks are picked for options trading, and provides a complete glossary and additional resources for traders.

• Thoroughly Comprehend Options Trading Risks
• Systematically evaluate risks associated with markets, volatility, inflation, taxation, portfolios, and knowledge
• Understand All the Elements of Value in an Options Trade
  Master concepts ranging from time-to-expiration to implied volatility
• Use the Right Strategies at the Right Time
  Know when to use covered calls, spreads, straddles, combinations, and synthetic positions
• The Options Marketplace: History, Evolution, and Trends
  Understand both the “forest” and the “trees”

Table of Contents

Introduction     1

Chapter 1: Market Overview     5

Chapter 2: Market Risks     19

Chapter 3: Elements of Value     35

Chapter 4: Return Calculations     49

Chapter 5: Options and Stock Selection     63

Chapter 6: Option Taxation     73

Chapter 7: Option Strategies A-C    81

Chapter 8: Option Strategies D-P     107

Chapter 9: Option Strategies R-Z     139

Chapter 10: Online Resources     191

Chapter 11: Option Print Resources     195

Chapter 12: Option Glossary     199

Appendix: Options Listings     273

Index     283