Options Trading for the Conservative Investor: Increasing Profits Without Increasing Your Risk (Financial Times Prentice Hall Books)

by Michael C. Thomsett

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Product Description

If you're an investor concerned with preserving capital, maximizing predictability, and maintaining consistently strong returns, your best solution just might surprise you: Options. In Options Trading for the Conservative Investor, Michael C. Thomsett reveals a narrow band of options strategies that can help you improve results as you systematically reduce unnecessary risk throughout your portfolio.

Thomsett, author of the global best-seller Getting Started in Options, writes in simple, nontechnical language, uses real examples, and guides you through every strategy—one easy step at a time. He's made this book simple and visual enough for any experienced investor to use, even if they have no experience trading options. Thomsett is also the author of Stock Profits: Getting to the Core (Financial Times-Prentice Hall 2004), The Leaps Strategist (Marketplace Books 2004), and Investment and Securities Dictionary (McFarland & Company 1986).

Thomsett systematically covers several options strategies optimized for conservative investors, including covered call writing on carefully selected stocks, contingent purchase strategies, and powerful "combination" strategies that produce cash to bolster current income. No matter how cautious an investor you are, this book will give you powerful new tools for achieving your financial goals—without losing a moment of sleep.

Fundamental ground rules for conservative options investors
What you should know and believe before you get started
How options fit into your conservative trading strategy
Deciding what stocks to buy or sell options on—and what to avoid
Examples and case studies based on an actual model portfolio
Practical guidance for leveraging each strategy with your own portfolio
Practical "rescue" strategies
Recovering your investments when market values have fallen
How to take profits without selling stock
Step-by-step techniques based on long puts and short calls

Improve Returns—Without Added Risk!

Easy, step-by-step options strategies for increasing income and protecting capital
Preserving your spending power after inflation and taxes
Avoiding unacceptable market, liquidity, and diversification risks
Protecting your profits without losing invested positions
No options experience necessary!
By Michael C. Thomsett, author of the worldwide best-seller Getting Started in Options, 6th Edition (John Wiley & Sons 2005)

The world's #1 options author has written the definitive options guide for conservative investors! One step at a time, you'll discover how to use options to increase yields, reduce risks, protect existing positions, and ride safely through any market down cycle. Want double-digit returns without heart-pounding risk? Here are the options you've been searching for!

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All Customer Reviews
Average Customer Review: 3.5 out of 5 stars

0 of 0 people found the following review helpful:

2 out of 5 stars

Good theory. . . but terrible presentation, 2008-11-11
The book presents valid ideas but is so poorly editited I can only give it two stars. It is full of errors and some of the assumptions in option pricing would never exist. Did the author even re-read what he wrote? I would not consider myself an "expert" but I have read and studied stacks of books on the subject and traded options for years. I also utilize his strategy for my portfolio.

Having said all that I would still recomend this book simply for the validity of the strategies presented, but only if you already have a good knowledge of options investing so you can identify the mistakes.

This book is recomended by many other authors of options related books. They could not have actually read the book or they would never have endorsed it. And the last point makes it hard to believe any further recomendations they would make on other authors.

Jim

0 of 0 people found the following review helpful:

4 out of 5 stars

A good book on options, 2008-05-10
As an investor I used to take investing with options as more of a speculative strategy, after going through this book, my view about investing with options is changed. Now I am convinced that in some situations, investing with options may yield better result then stocks.
One negative about the book; is repetition of the concepts, I would not complain much since that repetition clear my understanding of the new concepts.

1 of 1 people found the following review helpful:

3 out of 5 stars

Not pragmatic. Too much talk., 2007-07-28

The ratio of talk to concrete examples is 85% to 15%. I like straight to the point books, that can and should reinforce important points but keep the fluff to a minimum...

3 of 3 people found the following review helpful:

4 out of 5 stars

Option Trading for the Conservative Investor, 2007-07-21
Great book if you are considering doing options in your IRA or Roth. Author is very straight forward in pointing out pit falls with a number of option stradegies that could get one into trouble and on the flip side those that work that will build your portfolio over time. I also liked that the author spent some time on tax implications of Options that other authors never speak about. Author could have spent some time on how one searches for stocks that fit the conservative option stradegey, i.e. how to use filters and screeners in various web sites.

10 of 10 people found the following review helpful:

3 out of 5 stars

Not so conservative, 2007-06-17
Overall lots of information, but Thomsett does not fully explain the risks involved with selling covered calls. Essentially all of his model portfolio would have been in the money after selling the Leaps wtih in weeks. Rolling would not be practical as one could only roll up for the 27 month Leaps. Selling a Pepsico 27 mo. Leap at 50 with a current price (in Sept of '02) of 48.48 netted a $4.30 premium. The stock hit $50 within a month or so and was at about $63 by expiration. The only way out would be to roll up (at an ever increasing cost), hold for two years, or buy back the call. For the average investor (including myself) seems a bit complicated. If after selling a call, the price falls, the risk is even greater. One would need to close out the call by purchasing it back before selling the shares or risk having a naked call. The stradles described later in the book may reduce risk but for most trading accounts managing margin is not for the faint of heart. Definitely read this book with a large grain of salt and thourghly understand the risks associated with such options trading.

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