Trade Options, Make Money + Website, First Edition, An Intuitive Approach to Generating Consistent Profits for the Novice to the Experienced Practitioner by Khouw, Michael -- Read -- Imperial Library of Trantor

Index

Cover Series Page Title Page Copyright Table of Contents Dedication Introduction

Additional Resources

Chapter 1: What Is an Option, and How Do Options Work?

How Options Are Created, Extinguished, and Settled Exercising an Option Assignment Deliverables Behavior of Option Prices Option Premium Moneyness The Relationship between Puts, Calls, and the Underlying Asset Leverage and Risk

Chapter 2: Valuing Options with the Black–Scholes–Merton Option-Pricing Model

Assumptions of the Black–Scholes–Merton Option Pricing Model The Black–Scholes–Merton Option-Pricing Model Intuition behind the Option-Pricing Model Understanding the Drivers of Option Prices Putting It All Together: The Total Differential and Return Attribution Notes

Chapter 3: Trading Volatility

Realized Volatility Implied Volatility Skew and the Volatility Smile Term Structure of Volatility Volatility Surface The Relationship between Realized Volatility and Implied Volatility How to Trade Volatility Gamma Scalping Straddles Strangles Calendar Spreads

Chapter 4: Are Options Fairly Priced?

Modern Portfolio Theory (MPT) Capital Asset Pricing Model (CAPM) Evaluating Historical Returns on Put Options Evaluating Historical Returns on Call Options Conclusions about Option Returns Why Do Options Behave as If They Are Overpriced? Notes

Chapter 5: Fundamental Option Strategies

Single-Leg Puts and Calls Vertical Spreads Ratio Spreads Risk Reversals Call Spread Risk Reversals Income-Generating Strategies

Chapter 6: Portfolio Hedging Producing Enhanced Returns

Anticipatory Hedging Permanent Hedging Optimal Hedging Strategies Hedging High-Yield Debt with Equity Building a Proper Hedge Diagonal Put Spreads Performance Simulation: Hedging High-Yield Bonds Plus a Diagonal Put Spread 1 × 2 Ratio Put Spreads Hedging Equity Portfolios with 1 × 1.1 Ratio Diagonal Put Spreads

Chapter 7: Option Strategies for Special Situations

Option Strategy for Stocks under Heavy Short Interest Opportunities in Skew Dividend Capture

Chapter 8: Extracting Information from Options Prices

Option-Implied Distribution of Expected Future Price Implied Borrowing Cost on the Underlying Security Put/Call Ratio

Chapter 9: Synthetics

Put–Call Parity Synthetically Replicating Stock Synthetically Replicating a Call Synthetically Replicating a Put Synthetically Replicating Cash Creating Corporate Debt Synthetically

Chapter 10: Home Runs

The Oil Trade Warren Buffett and Berkshire Hathaway—Selling Puts and Buying Calls The Louisiana Purchase—The Greatest LBO of All Time Bitcoin

Chapter 11: Strike-Outs

The Carry Trade Portfolio Insurance Dotcoms Were Just Out-of-the-Money Calls Credit Blowup: Subprime Mortgage-Backed Securities Convergence Trades The Howie Hubler Trade (Short, Ratio Put Spread) The Latrell Sprewell Trade (Exercise In-the-Money Options)

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