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The Rookie’s Guide to Options: The Beginner’s Handbook of Trading Equity Options
$34.95
Mark D. Wolfinger, author
ISBN #: 978-1934354049
Learn to use options from a 20-year veteran of the CBOE! Many people dabble in options without understanding how they work and how they can be used most effectively. This book will give you the basic trading tools you need to start trading options profitably, as well as help you move on to more advanced strategies.
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PRODUCT DETAILS
Hardcover, 272 pages
Publisher: W&A Publishing; 1st edition (February 1, 2008)
Product Dimensions: 9.8 x 7.7 x 0.2 inches
Approx. Shipping Weight: 1.5 pounds
ISBN-10: 193435404X
COVER COPY
Stock options first traded on an exchange a mere 35 years ago and have exploded in popularity in recent years. Today nearly two billion options trade every year in the United States alone. Many people dabble in options without really understanding how they work and how they can be used most effectively. The Rookie’s Guide to Options: The Beginner’s Handbook of Trading Equity Options will give you the basic trading tools you need to start trading options profitably, as well as help you move on to more advanced strategies.
Options were created to allow risk takers to hedge part of that risk.
This book will help you learn to use options they way they were originally intended—to manage risk and increase profits. You’ll be guided step-by-step as the author guides you through the decision-making process in terms of puts, calls, strike prices, expiration dates and strategic equivalents.
Learn to use options from veteran option trader Mark D. Wolfinger, who spent more than 20 years on the floor of the Chicago Board Options Exchange (CBOE).
This book, aimed at the beginning options investor, will help you gain a clear understanding of how you’ve been using options for years, even if unaware of doing so. If you have bought car insurance, accepted a rain check at a discount store or used a bus transfer, you already understand the concept of using options. If you thought options were too complicated, Wolfinger’s clear and detailed explanations put that myth to rest. You’ll see how to adopt basic options strategies, how to use them to earn profits and how to manage risk effectively. You’ll move on to learn about the versatility of options and master advanced strategies, such as iron condors and double diagonals—all selected to help you minimize risk and maximize profits.
If you are a seasoned stock trader or a casual investor who dabbles in mutual funds, this book is for you. Learn why stock options—a versatile investment tool that has seen explosive growth over the past few years—belong in your portfolio.
If you’re already trading options, this book is also for you. You will gain a thorough understanding of option pricing, function and equivalents, which will help you trade more effectively. Learning to adopt more advanced option strategies, like iron condors and double diagonals, will help protect your nest egg and, at the same time, earn healthy returns.
Unlike many options guides, this book features step-by-step instructions, with extensive examples that outline the costs and benefits of each choice along the way—everything you need to plan and execute each trade on your own. Wolfinger shows you how to analyze alternatives and explains why each may be appropriate for a particular investor with certain investment objectives. You’ll develop a basis for deciding what is suitable for you and your investment philosophy. A thorough understanding of option basics will help you move on to powerful strategies to earn high returns with limited risk. Wolfinger’s strategies will help ensure that your portfolio survives a market downturn.
Learn how you can use options to:
1. Sell your stock above market value.
2. Turn a non-performing stock into a profitable investment.
3. Protect your holdings against a disastrous bear market—and even profit in a bear market.
4. Create steady income.
5. Manage risk.
6. Earn profits more often than those who buy only stock.
7. Limit losses.
8. Own investments that earn a profit when the market moves higher or lower.
READ MORE
Stock options first traded on an exchange a mere 35 years ago and have exploded in popularity in recent years. Today nearly two billion options trade every year in the United States alone. Many people dabble in options without really understanding how they work and how they can be used most effectively. The Rookie’s Guide to Options: The Beginner’s Handbook of Trading Equity Options will give you the basic trading tools you need to start trading options profitably, as well as help you move on to more advanced strategies.
This book will help you learn to use options they way they were originally intended—to manage risk and increase profits. You’ll be guided step-by-step as the author guides you through the decision-making process in terms of puts, calls, strike prices, expiration dates and strategic equivalents.
This book, aimed at the beginning options investor, will help you gain a clear understanding of how you’ve been using options for years, even if unaware of doing so. If you have bought car insurance, accepted a rain check at a discount store or used a bus transfer, you already understand the concept of using options. If you thought options were too complicated, Wolfinger’s clear and detailed explanations put that myth to rest. You’ll see how to adopt basic options strategies, how to use them to earn profits and how to manage risk effectively. You’ll move on to learn about the versatility of options and master advanced strategies, such as iron condors and double diagonals—all selected to help you minimize risk and maximize profits.
Learn how you can use options to:
1. Sell your stock above market value.
2. Turn a non-performing stock into a profitable investment.
3. Protect your holdings against a disastrous bear market—and even profit in a bear market.
4. Create steady income.
5. Manage risk.
6. Earn profits more often than those who buy only stock.
7. Limit losses.
8. Own investments that earn a profit when the market moves higher or lower.
If you are a seasoned stock trader or a casual investor who dabbles in mutual funds, this book is for you. Learn why stock options—a versatile investment tool that has seen explosive growth over the past few years—belong in your portfolio.
If you’re already trading options, this book is also for you. You will gain a thorough understanding of option pricing, function and equivalents, which will help you trade more effectively. Learning to adopt more advanced option strategies, like iron condors and double diagonals, will help protect your nest egg and, at the same time, earn healthy returns.
Unlike many options guides, this book features step-by-step instructions, with extensive examples that outline the costs and benefits of each choice along the way—everything you need to plan and execute each trade on your own. Wolfinger shows you how to analyze alternatives and explains why each may be appropriate for a particular investor with certain investment objectives. You’ll develop a basis for deciding what is suitable for you and your investment philosophy. A thorough understanding of option basics will help you move on to powerful strategies to earn high returns with limited risk. Wolfinger’s strategies will help ensure that your portfolio survives a market downturn.
MARKETING & PUBLICITY
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| "There seem to be new introductory options texts published every year, but Rookie's Guide stands out as one of the few texts that really deserves a reading from cover to cover." |
| –Jared Woodard, Condor Options |
| 08/20/2009 |
First Name: Brenda |
State: CT |
Rating: 4 |
Reading the Markets
Insights from Financial Literature
Brenda Jubin, Ph.D.
Originally posted Aug. 20, 2009 at http://readingthemarkets.blogspot.com/2009/08/wolfinger-rookies-guide-to-options.html
Mark D. Wolfinger’s book, The Rookie’s Guide to Options: The Beginner’s Handbook of Trading Equity Options (W&A Publishing, 2009) is perfect for the investor who is interested in writing covered calls and who might down the road consider some other options strategies. The rookie will still be a rookie after reading this book but, if he heeds Wolfinger’s words, he will not have committed a whole host of costly rookie errors.
Throughout the book Wolfinger describes options as more of a risk management tool than an outsized profit center. None of the “make 1256% in 5 days” hype. With any options strategy, he contends, it’s important to ask three questions: What do you have to gain? What do you have to lose? Can the strategy make a significant difference in the profitability of your investment portfolio? (p. 72) Where possible, he provides metrics to help answer these questions. For instance, a comparison of the Buy-Write Index (BXM) to the S&P Total Return Index (SPTR) shows that in wildly bullish times it’s better to own stocks outright. By contrast, in every year during the 1988-2003 period when the market returned less than 22%, BXM consistently outperformed SPTR. It’s worth noting that in the last five years this relationship has broken down. BXM underperformed in 2004, 2005, and 2006, the last year for which Wolfinger provides data. If my calculations are correct, the BMX outperformed in 2007 and underperformed in 2008. In brief, of late the strategy has been a little dicier to execute profitably.
Wolfinger acknowledges that covered call writing is not the best options strategy and recommends it primarily as a learning tool. Right here he may have given his best advice for the conservative rookie. I, and I assume most other investors, get countless invitations to investment dinners in which one of the most frequently advertised agenda items is “learn to make additional income month after month with covered calls.” The novice who is tempted to succumb but first wants a little more education might, after reading this book, take one step back. In fact, I would suggest that he try paper trading the strategy to gain a free education and to see whether it fits his risk/reward profile. Wolfinger provides all the basics for this education. He takes the rookie through the steps of preparing to trade, making the trade, and managing the trade.
Wolfinger then moves on to collars, which he views as the ultimate portfolio insurance policy. Whether or not one agrees with this thesis, the author serves the novice well by stressing the need to manage downside risk and providing one strategy for doing this. The final basic strategy that he discusses is writing cash-secured puts.
Although there are brief accounts of the Greeks and synthetics and although Wolfinger goes on to describe credit spreads, iron condors, and double diagonals, the strength of the book lies in the earlier chapters. He helps the beginner along with quizzes. On a bonus disc, he supplements the reader’s options education with a 25-question advanced quiz, some links, and articles he has written over the years for SFO magazine.
Mark D. Wolfinger’s book The Rookie’s Guide to Options: The Beginner’s Handbook of Trading Equity Options (W&A Publishing, 2009) is perfect for the investor who is interested in writing covered calls and who might down the road consider some other options strategies. The rookie will still be a rookie after reading this book but, if he heeds Wolfinger’s words, he will not have committed a whole host of costly rookie errors.
Throughout the book Wolfinger describes options as more of a risk management tool than an outsized profit center. None of the “make 1256% in 5 days” hype. With any options strategy, he contends, it’s important to ask three questions: What do you have to gain? What do you have to lose? Can the strategy make a significant difference in the profitability of your investment portfolio? (p. 72) Where possible, he provides metrics to help answer these questions. For instance, a comparison of the Buy-Write Index (BXM) to the S&P Total Return Index (SPTR) shows that in wildly bullish times it’s better to own stocks outright. By contrast, in every year during the 1988-2003 period when the market returned less than 22%, BXM consistently outperformed SPTR. It’s worth noting that in the last five years this relationship has broken down. BXM underperformed in 2004, 2005, and 2006, the last year for which Wolfinger provides data. If my calculations are correct, the BMX outperformed in 2007 and underperformed in 2008. In brief, of late the strategy has been a little dicier to execute profitably.
Wolfinger acknowledges that covered call writing is not the best options strategy and recommends it primarily as a learning tool. Right here he may have given his best advice for the conservative rookie. I, and I assume most other investors, get countless invitations to investment dinners in which one of the most frequently advertised agenda items is “learn to make additional income month after month with covered calls.” The novice who is tempted to succumb but first wants a little more education might, after reading this book, take one step back. In fact, I would suggest that he try paper trading the strategy to gain a free education and to see whether it fits his risk/reward profile. Wolfinger provides all the basics for this education. He takes the rookie through the steps of preparing to trade, making the trade, and managing the trade.
Wolfinger then moves on to collars, which he views as the ultimate portfolio insurance policy. Whether or not one agrees with this thesis, the author serves the novice well by stressing the need to manage downside risk and providing one strategy for doing this. The final basic strategy that he discusses is writing cash-secured puts.
Although there are brief accounts of the Greeks and synthetics and although Wolfinger goes on to describe credit spreads, iron condors, and double diagonals, the strength of the book lies in the earlier chapters. He helps the beginner along with quizzes. On a bonus disc, he supplements the reader’s options education with a 25-question advanced quiz, some links, and articles he has written over the years for SFO magazine. |
| 06/19/2009 |
First Name: Larry |
State: Non-US |
Rating: 5 |
From Canadian Business Online Blog, Jun 19, 2009
Book review: Rookie’s Guide to Options
By Larry MacDonald
I’m reading a great book on stock options entitled The Rookie’s Guide to Options: The Beginner’s Handbook of Trading Equity Options, written by Mark Wolfinger. It looks like a textbook (a slim one) but don’t be scared off: it isn’t a dull or strenuous read at all – at least that’s what I found.
In fact, I found it well written and easily understood. It doesn’t get bogged down in a lot technical minutia but explains in an intuitive way the central ideas such as the Black-Scholes method for valuing options and implied volatility (all in the first third of the book). As long as we understand the ideas behind the formulae, we can let the online calculators do the actual crunching of the numbers.
Still, I have to admit when I first picked up the book, I was a bit wary. The leverage in options is seen by many people as the route to a big score, but statistics show that the vast majority of option users with such aggressive orientations end up loosing their money. Then they swear off options for good, denying themselves a tool that could improve the performance of their portfolio in other ways.
But the author won me over with his sensible approach. Throughout the book he cautions readers to avoid swinging for the fences and instead focus on using options to reduce risk and/or implement conservative strategies that belt out singles and doubles. Small, but consistent, gains are a more sustainable strategy that trying to hit home runs.
Even if you want to use options to speculate aggressively, you should begin with conservative strategies, recommends the author. There is no better way to learn about options and see how they are affected by volatility, time decay, etc. than actually trading them — so do it in a manner where loses aren’t going to be overwhelming. I thought that bit of advice was worth the price of admission itself. It takes away some of the fear for the neophyte to know they can ease into options in a relatively safe way.
Wolfinger allots about a third of the book to explaining three strategies for conservative and/or beginning investors: i) covered call writing (selling options against stock holdings to earn extra income, ii) collars (adding a put option to a covered call position to protect against a large loss), and iii) cash-secured, or naked, put writing (sell a put option to earn income and buy a stock at a lower price).
After the section on conservative strategies, Wolfinger devotes the last third of the book to more advanced topics such Greek terminology, European-style options, credit spreads, iron condors, etc.
Originally published on: http://blog.canadianbusiness.com/book-review-rookie%E2%80%99s-guide-to-options/ |
| 04/02/2009 |
First Name: Jared |
State: NY |
Rating: 5 |
The Rookie’s Guide to Options: The Beginner’s Handbook of Trading Equity Options
Mark D. Wolfinger (W&A, 2008)
Thu, Apr 2, 2009
One of the ideas central to Mark’s work in his blog, his magazine articles, and in this book is that options are an excellent tool for just about any investor who wants to manage risk more effectively. What’s especially admirable about this book is that it takes a reader with no prior knowledge about options from the most basic concepts all the way through to advanced risk management and double diagonals in a little over 200 pages, and without sacrificing any clarity. There seem to be new introductory options texts published every year, but The Rookie’s Guide to Options stands out as one of the few texts that really deserves a reading from cover to cover. When new traders ask us to recommend an introductory book, this is where we will send them.
Part 1 introduces basic option concepts and key features of the options market in plain language. Discussing the components of the theoretical value of an option or the difference between implied and realized volatility in jargon-free language is harder than it sounds, and Wolfinger’s conversational approach is very effective in this respect. A review of order types, assignment, and the role of the OCC may seem almost too basic, but on more than one occasion we’ve heard from traders who were using complex spread types but had an irrational fear of early exercise; it never hurts to review the fundamentals. It’s also nice to see discussions of volatility and risk management placed before examination of any particular strategies.
Part 2 presents what Wolfinger calls the “basic conservative strategies,” namely covered call writing, collars, and writing cash-secured puts. These are the sorts of bread-and-butter strategies that retail investors can (and, in most cases, probably should) use to reduce portfolio volatility and possibly even improve returns. For traders who start to yawn a little at the thought of yet another discourse on covered calls, Wolfinger freshens up the material by examining the viability of the strategy via a comparison of the S&P Total Return Index and the CBOE’s Buy-Write Index (BXM). The presentations of collars and naked puts are also quite thorough, including analysis of techniques for dealing with losses and trades that are under pressure. Chapter 15, on synthetically equivalent positions, is essential reading.
Part 3 delves into some more advanced topics, but retains the conversational tone and example-heavy approach of the earlier sections. After treatment of the greeks and of American vs. European options, Wolfinger explains credit spreads, iron condors, and double diagonals. To the extent that the final three chapters are all about iron condors and variations thereof, this is the most attention paid in any book to date to the sorts of positive theta, market neutral positions that we teach on our site; for that reason alone we expect the book will be of interest to our readers. What’s particularly valuable about Wolfinger’s discussion is that he really engages with the strategies, going well beyond the basic descriptions and profit/loss graphs you would expect. One of the traps novice option traders often succumb to is the illusion that any one strategy or spread type is inherently better than the rest; while we all have our favorite techniques, one of the most laudable features of this book is that it puts that illusion to rest, giving a clear account of when and why a given spread or technique is called for.
The little bonuses are a nice touch: the book includes a CD-ROM with an option pricing calculator and an archive of Wolfinger’s published articles, and the quizzes at the end of each chapter are helpful.
Buy The Rookie’s Guide to Options today! Only $34.95!
Written by:
Jared Woodard, Principal, Condor Options
www.condoroptions.com
Originally published on:
http://www.condoroptions.com/index.php/books/the-rookies-guide-to-options-review/ |
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Mark D. Wolfinger has been in the options business since 1977, when he began his career as a floor trader at the Chicago Board Options Exchange (CBOE). Over the next 23 years, he worked primarily as a market maker, but also held a variety of positions in the industry, including risk manager, off-floor trader and coach for new traders. Wolfinger is still an active options trader who finds it more fun and less stressful to trade from his home computer than to trade in person on the exchange floor. After leaving the CBOE he began educating investors on how to use options profitably and safely. He gives trading seminars as well as provides individual mentoring via telephone or email. Over the past seven years, he has published three books and written more than 20 articles. Born and raised in Brooklyn, Wolfinger currently lives in Evanston, Illinois, with his life partner, Penny. He holds a BS from Brooklyn College and a PhD in chemistry from Northwestern University. Prior to his trading career, Wolfinger was a research chemist for Monsanto Company. His website is mdwoptions.com and he welcomes comments at rookies@mdwoptions.com.
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The Rookie’s Guide to Options: The Beginner’s Handbook of Trading Equity Options
$34.95
Mark D. Wolfinger, author
ISBN #: 978-1934354049
|
MARKETING & PUBLICITY
|
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Trade the Patterns: The Revolutionary Way of Trading the CCI
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|
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The Secret Keys to Smart Investing: Simple Strategic Rules to Diversify and Maximize Your Investment
|
|
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Smarter Investing in Any Economy: The Definitive Guide to Relative Strength Investing
|
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The Rookie’s Guide to Options: The Beginner’s Handbook of Trading Equity Options
$34.95
Mark D. Wolfinger, author
ISBN #: 978-1934354049
|
MARKETING & PUBLICITY
- Reviews in national media outlets (secured by W&A Publishing)
- Advertising campaign in international trade publication (arranged by W&A Publishing)
- Author-written articles in international trade publications (facilitated by W&A Publishing)
- Direct mail to opt-in e-newsletter subscribers (coordinated by W&A Publishing)
- Promotion on author's website, blog and online social networking communities
- Author-promoted and hosted webinars (assisted by W&A Publishing)
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