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Options Trading: The Ultimate Beginners Guide to Trading like the Rich

Options Trading: The Ultimate Beginners Guide to Trading like the Rich

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Options Trading: The Ultimate Beginners Guide to Trading like the Rich

évaluations:
5/5 (2 évaluations)
Longueur:
104 pages
1 heure
Sortie:
Mar 31, 2019
ISBN:
9781386702818
Format:
Livre

Description

Options Trading – Beginners Guide


Financial independence is something we've all dreamed of at some point in our lives. Nevertheless, it's something most of us deem near to impossible. From a young age, we are taught how to be obedient workers and not really how to obtain that freedom in life. One way of taking charge is to learn the game of options trading. By becoming a master in this field, you can end up living life on your own terms faster than you ever thought possible. However, learning how to become financially independent through options trading can be extremely difficult without the right guidance. 

Luckily for you, the contents of this book have been curated to provide you with everything you need to know in order to get started off on the right foot. 

Inside this book you will find: 

  • The most important options trading basics
  • The "Greeks" and how to use them efficiently
  • Fundamental analysis for options trading
  • Technical analysis for options trading
  • How to place your first trade
  • Best strategies to try
  • Tips and tricks for success
  • Mistakes to avoid
  • Bonus chapter on how to remove worries and enjoy your trading journey


Such a complex skill takes time and practice to master. Regardless of your dedication, it is possible to lose your shirt early on while you are learning the ropes if you aren't careful. This book offers you the perfect starting point. Together we will shorten the learning curve and save you a lot of time in your journey to becoming an options trading master.
 

So, what are you waiting for? Take control of your financial future and buy this book today!

Sortie:
Mar 31, 2019
ISBN:
9781386702818
Format:
Livre

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Lié à Options Trading

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Aperçu du livre

Options Trading - Matthew Newell

Conclusion

Introduction

Trading options offers up less of a learning curve for most people, simply because it is rarely the first type of trading, they try which means they have familiarity with an underlying asset right from the start. Nevertheless, it is still possible to lose your shirt early on while you are learning the ropes which is why the following chapters will discuss everything you need to know in order to start trading options successfully as soon as possible.

First, you will learn all about what sets the options trading apart from other types of trading you may be familiar with, including what to expect from an average trade, a breakdown of the ins and outs of options price and the options trading lingo you need to know in order to trade like the pros. Next, you will learn about risk as it applies to options trading, specially what are known as the Greeks and why you will want to consult them prior to every trade. You will then learn about how to analyze the underlying asset you are considering from a fundamental as well as a technical perspective.

From there, you will find a step by step outline describing how to create a personalized trading plan as well as how to put that plan into action by making your first options trade. To ensure you won’t have to make that trade blind, you will then find a wide variety of different starter strategies to try. Finally, there are plenty of tips and tricks for success as well as mistakes to avoid to ensure you have all the tools you need to maximize your success while trading options right out of the gate.

At the end of the book, you will also find a bonus chapter which will teach you how to keep your trading anxiety in check before it overwhelms you. Developing too many worries can have negative consequences on your trading career and your overall health and happiness. Learning how to keep worries at bay before getting into the advanced aspects of options trading is something worthy of an expert trader. Only by learning how to conquer your worries can you truly achieve financial freedom and end up enjoying your success.

Chapter 1: Options Trading Basics

While on its face, trading options might seem more complicated than trading stocks or bonds, the truth of the matter is that options are just another type of security-based trading which means that investors make money when they correctly estimate the direction the price of a given security is going to move in a specific period of time. Where options differ from other types of asset trading, however, is in what you are actually getting for your money when you purchase an option. Specifically, this means you are purchasing the ability, not the obligation, to purchase a specific asset at a specific price point that may or may not ultimately end up being a profitable exchange. If things end up not going the way the investor intended, they can then let the option expire with no penalty other than the fees required to place the options trade in the first place.

While this process might seem intimidating at face value, this whole process is quite similar to what occurs when you decide to purchase a new vehicle or a new home, negotiate a price, and then lock in the price in question while you go ahead and try and get a loan to cover the costs. In the interim, the price is going to be locked in regardless of what might happen in the market, good or bad, the same way purchasing an option gives you the ability to hold on to the price of an underlying asset. If the market swings heavily against them, then the potential buyer of the home, or the holder of the option, has the ability to walk away if things don’t go their way.

Options are commonly used as insurance for other investments that are riskier than would otherwise be advisable. This is done by purchasing a sell order at a given price that you know will retain its value until the period of potential disruption has passed. If the market tanks in the way you expect, you can then sell at your guaranteed price and make a profit, otherwise the option will expire harmlessly and all you will then be out is just the fees you paid to complete the transaction in the first place. While stock market options are the most commonly used, securities of varying types also have options which means that if you have already done the research on a particular market you can likely double down on it via options trading.

On the other hand, options can be used as a type of insurance on other, riskier investments as they can be purchased at the buy-in price for a risky underlying stock that you believe has the potential to either increase dramatically or decrease significantly. With the right option in place you can weather any uncertainty as if the bottom drops out from underneath the asset then you will still have a sale price that will at least prevent you from losing any investment capital in the interim.

While the chapters in this book are going to primarily focus on stock options, it is important to keep in mind that options trading is available for a wide variety of additional assets as well. Regardless of what type of asset is being optioned, all types of options are classified as either calls (buy orders) or puts (sell orders). From there, each call can be said to be short (expiring in hours, days or minutes) and long (expiring in months or years). Those who are interested in trading as opposed to investing are likely going to want to consider going short while those who are interested in long-term investing may want to consider long equity anticipation securities.

Those who actively buy and sell in the options market can typically be divided into 4 different categories. Those who purchase the options are often referred to as holders and those who sell are called writers. Writers and holders then typically tend to focus on either calls or puts, though there are those who go both ways as well. The biggest difference between writers and holders is that holders can either buy or sell depending on the way the market is going while writers are required to go along with what a holder wants, even if it is not in their best interest.

You will also want to keep in mind the two main different types of options, European and American. Despite the names, the differences in the two come from the freedom purchasing an option gives the holder. American options can be exercised from the point they are purchased to the point they expire. Meanwhile, European options can only be exercised right at the moment they expire which makes them the riskier of the two by a fair margin. Both American and European options fall under the classification of vanilla options which means they have standard rates and time limits while exotic options can vary based on a wide variety of criteria which makes them best avoided by beginners.

Know what to expect

If you are planning to trade successfully on a regular basis, the first thing you are going to need to work on is removing your emotions from the process completely.  Your goal will be to create a trading plan (discussed in chapter 5) which you can stick to completely, this will make it easier for you to make the right choices even if several trades have not gone in your favor and your emotions are getting the better of you.

The first step in this process, however, is to have a realistic idea of just what to expect from your initial foray into options trading.  This means getting rid of any flights of fancy that you might have that tell you that you will get rich after just a few trades and that you don’t need to do any research and can instead rely on your gut to see the types of long term results you are looking for. Additionally, you will want to start by keeping a journal of the emotions you feel through each part of the trade in question so that you can look back on them later on and get a clear idea of when you are likely

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  • (5/5)
    Good Read.Covers all the basics of option trading. Thank you.