The Bible of Options Strategies is a straightforward, easy-to-use reference work that should occupy a space on any options trader’s bookshelf.
Each chapter contains strategies that are commensurate with a specific style of options trading. Inevitably there’s some overlap between chapters for certain strategies, which we address in the appropriate places. Chapter 1 addresses the basic strategies, including buying and selling stocks and then buying and selling calls and puts. After you understand those cornerstones and how the pictures relate to each strategy, then you can fast-forward to any part of the book and any strategy you like.
Chapter 2 is all about income strategies. An income strategy is when you’re effectively a net seller of short-term options, which generates (monthly) income. You have to be careful, though, not to expose yourself to unlimited risk scenarios, which is why we use icons to identify excess risk.
In Chapter 3, we cover “vertical spreads.” A vertical spread is where we buy and sell the same numbers of the same options (calls or puts) but with different strike prices. Obviously, there’s some overlap here with other chapters, which is why the chapter is comparatively small. Chapter 4 goes into volatility strategies and is bound to be as popular as the income strategies chapter! Here we address those strategies that benefit from increasing volatility after you’ve placed the trade.
In Chapter 5, we reverse this and explore those strategies that benefit from decreasing volatility after you’ve placed the trade. So here we’re looking for stocks that we think will be rangebound for some time. Typically these are short-term strategies. Chapter 6 identifies the ratio spreads and backspreads, where you’re using increasing leverage to increase your returns. These are for advanced and experienced traders only!
In Chapter 7, we look at synthetic strategies that mainly mimic other strategic goals, using a combination of stock legs, call legs, and put legs. Lastly, in Chapter 8, we investigate some of the taxation issues that will confront you during your trading careers. This is not a definitive tax guide but rather more a flag raiser.
- The Four Basic Options Strategies
- Income Strategies
- Vertical Spreads
- Volatility Strategies
- Sideways Strategies
- Leveraged Strategies
- Synthetic Strategies
- Taxation for Stock and Options Traders
The Bible of Options Strategies: The Definitive Guide for Practical Trading Strategies By Guy Cohen pdf