Using Options to Buy Stocks: Build Wealth With Little Risk and No Capital
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Using Options to Buy Stocks is divided into four sections: The first one consists of Chapters 1 through 5 and describes the basic approach in using long-term options to further investment programs. The second section, Chapters 6 through 12, refines this approach and shows how to institute controls to reduce risk. The potential reward and the long-term safety of the basic approach and refinements are established through extensive computer simulation and backtesting. This is accomplished by going back ten years and asking what would have been the outcome if the various techniques had been applied in as consistent a manner as possible during that period.
The third section, Chapters 13 through 15, contains the analytic formulas for the rapid computation of volatility and option premiums for both European- and American-style options. The 1997 Nobel prize in economics was awarded to Myron Scholes and Robert Merton, who along with Fischer Black were the original developers of these formulas. With minor variations, they are still used today for calculating option premiums by market makers and option traders alike.
Although college mathematics is needed to understand the formulas, the short, simple algorithms given for their numerical evaluation can be used by virtually anyone who knows BASIC or can set up a spreadsheet on a personal computer. For readers without access to computer tools, there are various appendices containing tables for looking up option premiums and assignment probabilities. Finally, Chapters 16 and 17 contain suggested resources for additional information, including Internet Web sites and capsule reviews of introductory, intermediate, and advanced books on options.
Contents:
- Long-Term Options
- Basic Strategy
- Margin
- Disposition and Taxes
- Baseline Analysis
- Eliminating Dogs
- Out-of-the-Money LEAPS
- Roll ‘Em Out
- Buy ‘Em Out
- Advanced Strategies
- Hedging for Disaster
- Measuring Volatility
- Option Premiums
- American-Style Options
- My Favorite Web Sites
- Selected Bibliography
Using Options to Buy Stocks: Build Wealth With Little Risk and No Capital By Dennis Eisen pdf
| Author(s) | |
|---|---|
| Format | |
| Pages | 534 |
| Publication Year | 2000 |
3 reviews for Using Options to Buy Stocks: Build Wealth With Little Risk and No Capital
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Apollo Correa (verified owner) –
This is one of the most misleading books I’ve come across. The entire approach developed by the author is based on one assumption – the bull market will continue and it will bail you out. To prove the validity of his approach he selected 1987 – 1997, the greatest bull market in history, when DJI increased 300%. This is the only reason why his strategy “worked.” It’s hard to believe that a trained mathematician didn’t realize that the data he was using was flowed and didn’t include a long enough bear market. If he had used a period from 1964 to 1984 instead, his calculations would have shown him a huge loss and this book would have never be published.
For those who are still thinking about trying selling at-the-money LEAPS, I would suggest reading The Black Swan by Nassim Taleb first.
Kyle Odom (verified owner) –
Great experience
Laylani Trujillo (verified owner) –
We explain a method of achieving reasonable returns with reasonable risk! Of course, the bank or the 0815 Brooker will not point out, because fees and commissions will be reduced quite by this.
The book is worth its money, even if the volume is slightly inflated by many tables.