In Keene on the Market: Trade to Win Using Unusual Options Activity, Volatility, and Earnings, Andrew Keene describes a method of trading options using time‐proven spread strategies. Spread strategies use combinations of calls and puts, long or short, to maximize a trade’s profit potential while minimizing a trade’s risk or loss potential.
Author’s Introduction:
For every options setup that I trade, every time I make a trade, I look at the trade as a risk‐versus‐reward setup with targets and a predetermined plan of attack. I never buy a call for $1 and then say, “I hope I make money on this trade.” If I do buy that call for a dollar, I work through the CRRBTT part of my trading plan to know ahead of time how and when I will look to exit a trade. The CRRBTT, OCRRBTT, and HIMCRRBTT* Trading Plans will be defined and discussed in Chapters 18 and 19; their use has gone a long way in helping me stay profitable, and therefore they have become an integral part of my trading methods. I have used them throughout my 11‐year trading career to net 30 percent year‐over‐year returns on my money.
- CRRBTT (C = chart; R = risk; R = reward; B = breakeven; T = time; T = target);
- OCRRBTT (O = option volume versus open interest),
- and HIMCRRBTT (H = historical volatility, I = implied volatility; M = measured move target; C = chart; R = risk; R = reward; B = breakeven; T = time; T = target)
This book introduces the world of options trading, dealing with topics such as the psychology of a trader, who the key players are, what is a derivative, what is an option, and complex options strategies and unique trading plans such as the OCRRBTT and HIMCRRBTT. We will look at how to combine the separate elements of options trades into more complex, yet safer, options trades. Obviously, one of my goals is to make money, but another is to never have another blowout. As I mentioned earlier, one is not a real trader until one has had a blowout. I have blown out a few times and questioned myself as a trader and whether I had what it took to make it trading.
However, I’ve learned a way of trading options that minimizes my potential for loss while increasing my chances for a positive outcome: making money (or at least breaking even). I no longer trade in the pits like I did for so many years; now I trade in front of two computers and seven monitors, what is commonly called “trading upstairs.” Trading is not for everyone, but I know it is for me and I would not trade it for anything in the world.
Contents:
- The Life of a Professional Trader
- Trading for a Living: Hobby or Career?
- Who the Players Are: Market Makers
- Options Brokers and Platforms: The Right Options Broker for You
- Technical Trading: Security Timing Tactics
- Reading the Market and Implied Volatility: Market Sentiment
- Options Basics Primer: What Are Options?
- The Greeks
- Call and Put Trading Strategies
- Why Is Everyone Long Stock?: How to Use Options for a Hedge
- What Are Synthetic Options Positions?
- What Is Volatility and How Does It Affect Options?
- Various Uses of Options and Why I Love to Trade Them
- More Complex Options Strategies
- Managing Trades on Expiration
- Andrew Keene’s Non-Blowout Trading Plan: How Much of Your Portfolio Can You Risk?
- Andrew Keene’s OCRRBTT Trading Plan
- Trading Earnings (HIMCRIBBIT )
Keene on the Market: Trade to Win Using Unusual Options Activity, Volatility, and Earnings By Andrew Keene pdf
