Understanding Options

Submitted by Book Library on 5 March, 2010 - 23:01

Written by Michael Sincere, the best-selling author of Understanding Stocks and other popular investing books, this down-to-earth guide employs short, concise chapters to explain what options are, the various types of options, how to trade options, how to avoid investing mistakes, beginning and advanced options strategies, and much more. Understanding Options tells you in jargon-free language how options are income-producing tools; how options can be part of an overall investing plan; the relationship between options and stocks; the pros and cons of options, how personal computers have made options easier than ever to understand and use; and much more. "Mike Sincere has been able to take a very complex subject, option trading, and detail it into an understandable book that may become the model for textbooks for teaching the basics.

The flow of the book makes all readers eager to learn more and to approach options with an understanding of the investment vehicle. "MARK D. COOK, developer of the Cook Cumulative Tick and winner of the Options Division of the U.S. Investing Championship "To me, the best books in the financial industry include topics that are well organized, have a reader-friendly style, and are filled with timely, compelling content. Understanding Options definitely meets these criteria. Michael Sincere's Understanding Options deserves a place in every investor's library."

Positive Review of Understanding Options

Reading a book on Options Trading is usually a daunting task. While it is true that statistical probabilities, The Greeks and mathematically determining an overpriced or underpriced option all play a part in option trading, in the beginning, this often confuses and intimidates a novice. Michael Sinceres' book is different. He leaves the mathematics alone. In very simple language, Sincere walks you through the four basic option trades:

  1. The Covered Call
  2. Buying a Call
  3. Buying a Put
  4. Selling a Put

What you may not know is that most brokerages will limit a beginning option traders to these 4 trades anyway. As if he were sitting at your kitchen table, Sincere actually takes you step- by-step, through each trade. No, this is not a complete treatise on option trading but it is a very good start.

It is true that the key to option success is choosing the right underlying stock. If you have never bought a stock, his book on stock trading would be a better choice. It is also true that options are a form of gambling and anyone who says their "system" guarantees success is probably selling something very expensive. If you have experienced trading stocks and are looking for your first option book, this would be the one I'd recommend.

Negative Review of Understanding Options

This book was not worth buying. It is too rudimentary. Even someone who doesn't intend to trade options would want to know more than this book offers. For someone who wants to trade options it is totally inadequate.

Author Biography

After initially losing money in the stock market, Michael Sincere interviewed dozens of investors and traders and wrote hs first book, 101 Investment Lessons from the Wizards of Wall Street. This was followed by four more books, including Understanding Stocks (McGraw-Hill, 2003) and Understanding Options (McGraw-Hill, 2006). He has written numerous columns and magazine articles on investing and trading -- Michael Sincere has also been interviewed on dozens of national radio programs and have appeared on several financial news programs such as CNBC and ABC's World News Now! to talk about his books.

Table of Contents

  1. WHAT YOU NEED TO KNOW FIRST
    • Welcome to the Options Market
    • How to Open Up an Options Account
    • The Fascinating Characteristics of Options
  2. SELLING COVERED CALLS
    • The Joy of Selling Covered Calls
    • How to Choose Profitable Covered Calls
    • Step-by-Step: Selling Covered Calls
    • Managing Your Covered Call Position
  3. HOW TO BUY CALLS
    • Introduction to Call Strategies
    • How to Choose Profitable Calls
    • Volatility and Options Pricing
    • Step-by-Step: Buying Calls
    • Managing Your Call Position
  4. HOW TO BUY PUTS
    • How to Choose Profitable Puts
    • Managing Your Put Position
  5. ADVANCED OPTIONS STRATEGIES
    • Straddles and Spreads
    • Selling Naked Puts and the Strangle
  6. UNCOMMON ADVICE
    • Sheldon Natenberg: Professional Options Trader
    • What I Really Think About Options

Discover more Trading books at BookofTrading.com!

Download our FREE App


Signup for Free
Don't miss out on your free share trading articles.


Free Risk Money Management Calculator for those who sign up!