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Some luck is needed with any type of investing, but investors who are successful in the long-term do not rely on it. Instead, consistently successful traders effectively utilize the tools, instruments, and information at their disposal and learn how to adapt to the dynamic conditions of the market. Options are precisely customizable financial assets that have the capacity to generate profits in any type of market environment. For more risk-tolerant traders, they can be used to build reliable investment strategies, tailored according to one's personal profit goals and risk preferences. Investors often fall into the trap of focusing on the potential rewards of options without properly assessing the associated risks or building strategies that are not backed by statistics.
The Unlucky Investor's Guide to Options Trading elucidates these pitfalls and teaches new investors all about the basics of options and how to develop sustainable, actionable options strategies consistent with one's personal investing objectives.
"Options trading and cards for money aren't for fools hoping for luck. This is a serious but easy to read introduction for those ready to try constructing options trades."
--
Aaron Brown, Author of
The Poker Face of Wall Street and Red-Blooded Risk "Captivating -- that usually describes a spy thriller, but it applies well to this options trading book... If you think you know everything about options already, this book will surprise you."
--
Ernest P. Chan, Author of
Quantitative Trading: How to Build Your Own Algorithmic Trading Business
List of contents
Foreword ix
Preface xiii
Acknowledgments xv
About the Authors xvii
Introduction: Why Trade Options? 1
Chapter 1: Math and Finance Preliminaries 5
Chapter 2: The Nature of Volatility Trading and Implied Volatility 41
Chapter 3: Trading Short Premium 57
Chapter 4: Buying Power Reduction 83
Chapter 5: Constructing a Trade 93
Chapter 6: Managing Trades 117
Chapter 7: Basic Portfolio Management 133
Chapter 8: Advanced Portfolio Management 149
Chapter 9: Binary Events 163
Chapter 10: Conclusion and Key Takeaways 169
Appendix 177
Glossary 187
References 193
Index 195
About the author
JULIA SPINA is a member of the research team and podcast co-host at tastytrade where she works as a financial educator and options strategist. Drawing from her background in physics and experience with signal processing and data analysis, Julia introduces viewers to topics in quantitative finance and their applications in options strategy development. At the University of Illinois, she earned bachelor's degrees in engineering physics (2017) and applied mathematics (2017) and a master's in physics (2018).
TOM SOSNOFF is an online brokerage innovator, financial educator, and the founder and co-CEO of tastytrade. Tom is a serial entrepreneur who cofounded thinkorswim in 1999, tastytrade in 2011, tastyworks in 2017, helped to launch
Luckbox magazine in 2019, and in 2020 created the first new futures exchange in 20 years,
The Small Exchange. Currently, Tom hosts tastytrade LIVE and continues to drive know-how for the do-it-yourself investor. Tom has been named to Techweek's Tech 100 list,
Crain's Chicago Business's Tech 50, and has spoken at more than 500 events across the globe.
