My Amazon Rating: 5 out of 5 Stars
I really enjoyed this book – it covers two areas that are key to my Investment process (calculating the fair value of publicly traded companies and how to intelligently trade options based on those valuations).
I especially like the graphics in this book – which are very unique – they clearly demonstrate the Authors approach and ideas regarding Intelligent Options Trading.
Make sure you don’t skip Appendix A – which clearly outlines what types of situations work best (and worst) based on the strengths and weaknesses of the Black-Scholes-Merton model (BSM) for pricing options. You may need to read this section several times, but it is crucial for understanding how to find the best opportunities for your risk capital.
If you are just starting out – I would suggest supplementing this book with a few others, which go into more depth regarding the transactional processes involved with options trading. I have several book recommendations listed on my home page.
Hi Z,
I purchased this book too and while I liked much of it, I found his advice to buy the longest dated option possible questionable. Sure you get more time for your thesis to play out but you are paying a premium. The author says this is ok because the cost per day of the longer option is lower…this inspired me to take a closer look and make a blog post -http://blindfreddy.postagon.com/92ddfy6cc
I really only sell options on stocks I have decided I would like to own – don’t really buy options based on a directional bias – I am just not very good at that. I usually look to sell 30 to 45 days out – that is my comfort zone.
Z
Agree selling naked puts is a good way to go for those who really know what they’re doing.
I enjoyed buying LEAPS (calls) in 2013 and to a lesser extent 2014, but in 2015 that practice brought me rather unstuck, despite one big winner. In future I will be paying more attention to general market health before buying LEAPS. As they say look before you leap !