High performance options trading

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Experts are praising High Performance Options Trading From OptionVue™ Systems’ Len Yates

"Finally! A book by fellow Boilermaker and option software guru Len Yates! This book is a must-read for anyone interested in a sensibly based, analytical approach to options trading–whether you’re a stock or a future options trader. And the story behind the creation of OptionVue™ is a fascinating bonus." –Larry McMillan, McMillan Analysis Corp. author of Profit with Options and McMillan on Options

"An expert on volatility-based trading, Len Yates applies the same practical approach to this book as he has to his highly regarded software. This is not a technician’s white paper, but a thorough, accessible guide that uses his real-life trading history to fully illustrate how you can succeed in the options markets." –Jim Bittman, Senior Instructor, CBOE’s Options Institute author of Trading Index Options and Options for the Stock Investor

"For over two decades Len Yates has helped bring options to the masses by way of his groundbreaking software, OptionVue™ 5. Now, his new book offers the same user-friendly style and insight to the world of options investing. I’m sure I speak for thousands of grateful investors when I say, ‘Well done, Len!’" –Jon "Doctor J" Najarian, PTISecurities.com author of How I Trade Options

"Len leads the reader through the complex subject of options by recounting his triumphs and defeats and explaining in plain English the essence of each strategy." –David Krell, President and CEO, International Securities Exchange (ISE)

"A must-read for all options traders." –Paul Forchione, Opportunities in Options, Inc.

"From a master of options analytics comes this practical guide to options trading. Beginning and advanced traders alike will appreciate Len’s thorough coverage of options strategies and his easy-to-read style." –Price Headley, President, BigTrends.com author of Big Trends in Trading

Author(s): Leonard Yates, Marketplace Books
Edition: 1st
Publisher: Wiley
Year: 2003

Language: English
Pages: 238

High Performance Options Trading......Page 3
Acknowledgments......Page 9
Contents......Page 11
A Note from the Author......Page 15
Introduction......Page 17
CHAPTER 1 The Language of Options......Page 21
The Basics......Page 22
Listed Options......Page 24
Longs and Shorts......Page 26
A Bit More Terminology......Page 27
Offsetting Option Trades......Page 30
American versus European......Page 31
Quotations......Page 32
The Special Properties of Options......Page 34
Time......Page 35
How Options Respond to Changing Conditions......Page 38
The Greeks......Page 39
The Role of the Market Maker......Page 41
Volume and Open Interest......Page 42
CHAPTER 2 Option Strategies......Page 45
Long Call......Page 46
Short Covered Call......Page 47
Short Naked Call......Page 49
Long Put......Page 50
Short Covered Put......Page 51
Short Naked Put......Page 52
Long Put with Long Stock......Page 53
Equivalent Strategies......Page 54
Combinational Strategies......Page 59
CHAPTER 3 Volatility......Page 63
Volatility Trading—Buying and Selling Volatility......Page 64
Tools of the V-Trade......Page 66
Selling High Volatility......Page 67
Buying Low Volatility......Page 70
Delta-Neutral Trading—In a Nutshell......Page 74
Seasonal Patterns in the Grains......Page 75
Other Commodities......Page 79
Volatility Skew—What Is It and How Can I Use It?......Page 80
The Relationship between Volatility and Price......Page 84
Buying Nearby Options—The Swing Trader’s Perfect Tool......Page 89
Debit Spreads—The Calm Approach......Page 93
Strategies for Trending Markets......Page 96
The Horizontal Spread—A Good Strategy in a Sideways Market......Page 98
Credit Spreads—Say “Don’t Go There”......Page 102
Condors—Two-Winged Creatures......Page 105
The Backspread—A Directional Strategy that Costs Nothing If You Are Wrong......Page 108
Covered Writing—Enhancing Your Returns......Page 112
LEAPS—An Alternative to Stock......Page 115
The Synthetic—Another Alternative to Stock......Page 118
The Butterfly Spread—When You Have a Narrow Target Range......Page 120
Using the Right Option Strategy......Page 121
Playing Takeovers......Page 125
Letting the Options Market Tip You Off on Takeovers......Page 127
Covered Writing with Convertible Securities......Page 131
Investing in a Rough Market......Page 138
Options Pricing Models......Page 147
Coming Up with the Right Volatility......Page 153
Volatility Skew......Page 154
What Causes Volatility Skew?......Page 156
Put/Call Parity......Page 159
The Greeks Revisited......Page 161
True Delta and Gamma......Page 163
Understanding the Limitations of Your Model......Page 164
Dealing with Anomalies and Pricing Difficulties......Page 166
CHAPTER 7 Tips for Beginners......Page 169
The Psychological Battle......Page 174
Trading Mistakes and What I Learned......Page 176
Some Thoughts on How Trading Fits In with Real Life......Page 178
Directional Trading Using Pattern Recognition......Page 181
Timing the Market Using the VIX......Page 189
Why a VIX Spike Stops a Market Sell-Off......Page 199
Starting the Business (on a Shoestring)......Page 205
Business Philosophy......Page 211
Glossary......Page 215
Index......Page 233