About the Book
"The Complete Book of Option Spreads and Combinations will be the definitive educational resource and reference guide for using option spreads and other sophisticated option strategies. Option spread trading has grown rapidly in recent years due to the reduction in brokerage commissions and ease of execution through electronic platforms. Author Scott Nations will cover vertical spreads, calendar spreads, ratio spreads, diagonal spreads, butterflys, iron butterflys, straddles, strangles, condors, and iron condors. Nations will describe the inner workings of each strategy, describing how the strategies are impacted by movements in the underlying market, implied volatility, and time decay. Most importantly, he identifies market conditions where each strategy performs well and market conditions where each strategy should be avoided. Readers will learn: n How to generate monthly income by selling covered stranglesn Using call spreads to recover from a losing stock positionn Using put diagonals to protect an existing stock positionn The best strategies for directional market plays Once the proper strategy is suggested, Nations shows how to identify the best options to use based on "moneyness" (in-the-money, out-of-the-money or at-the-money) and time to expiration. He then describes how to monitor, adjust, and close each trade to maximize profits and minimize losses. Comprehensive and authoritative, The Complete Book of Option Spreads and Combinations will provide traders with a valuable how-to manual and a lasting reference"--
Book Synopsis
Get a handle on option spreads to hike profit and squash loss
The Complete Book of Option Spreads and Combinations is the definitive educational resource and reference guide for using option spreads and other common sense option strategies. This useful guide shows readers how to select the right strategy for their market outlook and risk/reward comfort level by describing the inner workings of each strategy and how they are affected by underlying market movements, implied volatility, and time decay. Even more importantly, readers will understand where each strategy performs well, and the market conditions where each should be avoided. Once the proper strategy is selected, readers will learn how to identify the best options to use based on "moneyness" and time to expiration. The companion website features tools including an option pricing tool and implied volatility calculator to help all traders implement these concepts effectively.
There are many different types of spreads, and while less risky than other option strategies in general, they are more complex, with more variables to monitor. This guide serves as a handbook for the trader wanting to exploit options to the greatest possible benefit.
- Generate monthly income by selling covered strangles
- Use call spreads to recover from a losing stock position
- Protect an existing stock position using put diagonals
- Discover the best strategies for directional market plays
Option spreads are a great tool for traders who would rather be an option seller but who need to limit their risk. The Complete Book of Option Spreads and Combinations identifies those strategies that benefit from option erosion but that limit risk.
If managed properly, spreads can provide both novice and experienced investors with the potential for a large return while limiting risk. Electronic trading platforms and reduced brokerage commissions have increased option spread trading, which should occupy a spot in every savvy investor's toolkit. Comprehensive and authoritative, The Complete Book of Option Spreads and Combinations provides a valuable manual and lasting reference.
From the Back Cover
Praise for The COMPLETE BOOK of OPTION SPREADS AND COMBINATIONS
"Option spreads are a vital tool for any serious trader and Scott Nations explains how and why to use them better than anyone else. This book is a step by step guide, covering everything from the basics to more complicated strategies, and Scott's years of experience come through in his valuable and entertaining narrative. I recommend this book to options traders of all levels, as well as to anyone interested in adding a powerful new strategy to their financial toolbox." --Jackie DeAngelis, Host of CNBC's Futures Now
"The explosive growth of options trading among retail investors is one of the most exciting and potentially dangerous trends in the stock market. Professional investors are happy to welcome the new money because most it ends up in their pockets. Newcomers are drawn to the potentially explosive rewards, but they'll never see those gains unless they first have a roadmap and a full grasp on how to match their strategies to their goals and risk tolerance.
Scott Nations is one of a select few voices in financial punditry with the mental horsepower to understand sophisticated strategies and clarity of voice to explain those techniques in a way readers will be able to grasp and put to work. Getting the secrets of professional traders is great but what individual investors really need to have is a grasp of the strategies that fit their needs.
Don't try to teach yourself how to trade options on the fly. Arm yourself with as much personalized knowledge as you can get. Before you trade options invest in this book. Read it... twice." --Jeff Macke, Host on Yahoo! Finance, original cast member of CNBC's Fast Money, founder of Macke Asset Management, and a hedge fund manager
About the Author
SCOTT NATIONS is president and chief investment officer of NationsShares, a division of Fortress Trading Inc. Previously, Nations was head trader for Sovereign Capital and a floor trader at both the Chicago Board of Trade and the Chicago Mercantile Exchange. He appears regularly on CNBC.
