Options Made Simple: A Beginner's Guide to Trading... (PDF) (2024)

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Summary Options Made Simple: A Beginner's Guide to Trading Options for Success

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spine 15.5 mmA beginner’s guide to trading options for successOptions Made Simple is the essential guide foranyone who wants to learn about options trading,without all the fuss.Options are a fexible trading tool that can be used in a wide range of strategies.OptionsThey suit all investors, whether bold or risk-averse. In Options Made Simpleyou will discover how options trading works and develop the knowledge andstrategies to implement your own options trading plan successfully.Inside you’ll fnd information on:➤ types of options and how they can be traded➤ advantages and disadvantages of options trading SIMPLE, EASY TO UNDERSTAND➤ how to buy, sell and exercise optionsSTRATEGIES ANYONE CAN USE FOR SUCCESS!➤ how to choose the right option strategy for you➤ option strategies that reduce risk➤ option strategies for generating profts➤ using multiple options in advanced strategies.If you’re ready to trade options and maximise your success without all thestress, this is the book for you.Jacqueline Clarke is a qualifed accountant and a trader of shares and derivatives.Together with Davin, Jacqueline manages their extensive trading business as theirprimary source of income.Davin Clarke is a well-known and highly successful private trader. He is a popular andsought-after speaker and has featured in several books, including The Wiley TradingGuide and 20 Most Common Trading Mistakes and How You Can Avoid Them. Heco-authored Trading Plans Made Simple with Jacqueline Clarke.Jacqueline Clarke& Davin Clarkewww.wiley.com AU$27.95 NZ$31.99 Authors of Trading Plans Made SimpleTRADINGOptions Made Simple Final.indd 1-3 29/08/11 5:45 PMOptions Clarke

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First published in 2012 by Wrightbooksan imprint of John Wiley & Sons Australia, Ltd42 McDougall St, Milton Qld 4064Ofﬁce also in MelbourneTypeset in Berkeley LT 11.5/13.4 pt© Jacqueline Clarke 2012The moral rights of the author have been assertedNational Library of Australia Cataloguing-in-Publication data:Author: Clarke, Jacqueline.Title: Options made simple : a beginner’sguide to trading options for success /Jacqueline and Davin Clarke.ISBN: 9780730376378 (pbk.)Notes: Includes index.Subjects: Options (Finance)Other Authors/Contributors: Clarke, Davin.Dewey Number: 332.6453All rights reserved. Except as permitted under the Australian Copyright Act1968 (for example, a fair dealing for the purposes of study, research, criticismor review), no part of this book may be reproduced, stored in a retrievalsystem, communicated or transmitted in any form or by any means withoutprior written permission. All inquiries should be made to the publisher at theaddress above.Cover images and design by Peter Reardon, Pipeline Design <www.pipelinedesign.com.au>Printed in Australia by Ligare Book Printer10 9 8 7 6 5 4 3 2 1DisclaimerThe material in this publication is of the nature of general comment only, and doesnot represent professional advice. It is not intended to provide speciﬁc guidance forparticular circ*mstances and it should not be relied on as the basis for any decisionto take action or not take action on any matter which it covers. Readers shouldobtain professional advice where appropriate, before making any such decision.To the maximum extent permitted by law, the author and publisher disclaim allresponsibility and liability to any person, arising directly or indirectly from anyperson taking or not taking action based on the information in this publication.FM.indd 4 8/25/2011 11:48:16 AM

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ContentsAbout the authors vii1 What are options? 12 Advantages and risks 153 Types of options 294 Option pricing 455 The mechanics: how to buy, sell and exercise options 676 Buying options: the scenarios 797 Selling options: the scenarios 978 Choosing your option strategy 1159 Strategies for buying call options 12310 Strategies for buying put options 13711 Strategies for selling covered call options 15512 Strategies for selling naked call options 17513 Strategies for selling put options 189vFM.indd 5 8/29/2011 6:51:10 AM

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14 Advanced strategies: using multiple option spreads 20115 Advanced strategies: straddles and strangles 221Appendix 233Glossary 237Index 241viFM.indd 6 8/25/2011 8:47:00 AM

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About the authorsJacqueline Clarke is a private trader, chartered accountantand author of Trading Plans Made Simple. Together with DavinClarke, she has over 10 years’ experience in managing theirprivate business, trading equities, options, warrants, futuresand currencies. As a trader and accountant, Jacquelinehas a unique understanding of risk management, trademanagement and how to successfully trade to produce asource of income.Davin Clarke is principal of Tzar Corp and is a successful full-time private trader. Davin has earned his primary income fromtrading since 2000, and has a ﬁrst-hand understanding of whatit takes to trade full time. Davin provides a limited numberof trading skills workshops through Tzar Corp for equities,futures and options traders. Davin is regularly sought forspeaking engagements and is featured in a number of books,including The Wiley Trading Guide, 20 Most Common TradingMistakes and How You Can Avoid Them and Real Traders, RealMoney, Real Lives.viiFM.indd 7 8/25/2011 8:47:00 AM

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