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The Complete Guide to OPTION SELLING How Selling Options ... · The Complete Guide to OPTION SELLING How Selling Options Can Lead to Stellar Returns in Bull and Bear Markets Third

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Page 1: The Complete Guide to OPTION SELLING How Selling Options ... · The Complete Guide to OPTION SELLING How Selling Options Can Lead to Stellar Returns in Bull and Bear Markets Third

The Complete Guide to

OPTION

SELLING

How Selling Options Can Lead to Stellar

Returns in Bull and Bear Markets

Third Edition

JAMES CORDIER AND

MICHAEL GROSS

Mc Graw Hill Education

New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi

San Juan Seoul Singapore Sydney Toronto

Page 2: The Complete Guide to OPTION SELLING How Selling Options ... · The Complete Guide to OPTION SELLING How Selling Options Can Lead to Stellar Returns in Bull and Bear Markets Third

CONTENTS

Acknowledgements

Introduction

Part I: Selling Options: Why and How it Works

1. The Option Seilers Secret: Excelling in the Worlds Most Underrated (and Undiscovered) Investment Strategy

2. The "Who" of Selling Options: Insights From 30 Years in the Options Market

3. Why Aren t You Selling Options? The Key Advantages of Option Selling

4. Buying Options Versus Selling Options: Who Wins?

5. Option Selling on Steroids: An Introduction to Futures Options

6. SPAN Margin: Your Key to High Returns

Part II: Option Selling Strategy and Risk Control

7. How to Pick the Right Option to Seil: Lessens Learned from Three Decades in the Field

8. The Use and Abuse of Spreads: How to Keep Them from Taking Your Money

9. Recommended Spreads: The Few and the Proud: Spread Strategies That Really Work for the Individual Investor

Page 3: The Complete Guide to OPTION SELLING How Selling Options ... · The Complete Guide to OPTION SELLING How Selling Options Can Lead to Stellar Returns in Bull and Bear Markets Third

iv * Contents

10. The Best Option-Selling Strategy Ever: The Ratio Credit Spread 159

11. Option-Selling Mechanics: Quick Tips on Liquidity, Timing, Order Placement, Assignment, Limit Moves, and More 169

12. Managing Your Option-Selling Risk: Defense Wins Championships 181

Part III: Market Analysis and Option Selling 203

13. Fundamentals: The Dirty Little Secret About how Money Really Gets Made in Commodities 205

14. Key Fundamentals of Select Markets: What to Watch, Where to Find Them 223

15. Seasonal Tendencies in Option Selling: A Most Potent Profit Formula 243

16. The Best Markets for Seasonal Option Sales: A Primer for Seasonal Neophytes 261

17. Volatility Simplified: All You Need to Know About the Most Misunderstood Option Component 287

18. How to Structure Your Option-Selling Portfolio: Tips on Building Your Premium Ladder 297

Part IV: Getting Started 307

19. How to Avoid the Mistakes New Option Seilers Make: Learn Them Here and Save Yourself Time, Money, and Headaches 309

20. Finding a Good Broker or Money Manager: The Best Trading Decision You'll Ever Make is Choosing the Right Professional 319

21. Option Selling as an Investment: Frequently Asked Questions 331

22. -Pulling It All Together: A Quick Review of What You Have Learned 343

References and Resources 351

Index 355

About the Authors 362