Spread Trading: An Introduction to Trading Options in Nine Simple Steps

A proven method for making the most of options

While professional investors are doing more and more in the way of options trading, nonprofessionals know little about this opportunity and the tremendous advantages it offers. This book provides readers with the basic tools to begin trading options through the best and safest method available: spread trading. With Spread Trading, Greg Jensen continues to educate individuals on the benefits of trading this way. And while most discussions about options trading do not emphasize how both parties in an options trade can come out ahead, Spread Trading takes the time to explain what it takes to profit from either side of the table.

Greg Jensen is a Registered Investment Advisor and cofounder of Spread Trade Systems, an industry leader in investment education.

Though there are many variations and nuances, the basic concept of options trading is simple: An investor can purchase an option to buy stock without actually buying the stock itself. Then, as the value of the stock rises, the value of the option rises also. The investor can then sell that option to someone else for a profit-without ever having owned the underlying stock. This book provides readers with the basic tools to begin trading options through the best and safest method available: spread trading. Spread trading is the practice of combining options trades and adjusting them over time. In addition, while most discussions about options trading do not emphasize how both parties in an options trade can come out ahead. Spread Trading undercuts this assumption and explains how to profit on either side of a deal.

Acknowledgments. About the Author. Introduction. STEP ONE Understanding the Long and Short of "Call" Options in the Market. CHAPTER 1 Lon and Shorty. CHAPTER 2 Lets Make a Deal. CHAPTER 3 Trading Rights and Obligations. CHAPTER 4 Some Key Terms . . . that Almost Make Sense! CHAPTER 5 Strike One . . . . CHAPTER 6 Strike Two . . . . CHAPTER 7 Time Travel. CHAPTER 8 RPut Options in the Market. CHAPTER 11 Bulls, Bears, and Stags. CHAPTER 12 The Put: Reaching a Different Trade of Rights and Obligations. CHAPTER 13 Strike One . . . . CHAPTER 14 Strike Two and Time Travel. CHAPTER 15 R&R for Lon. CHAPTER 16 R&R for Shorty. CHAPTER 17 The Big Picture . . . So Far. CHAPTER 18 How Lon and Shorty Came Out on Their Deal. STEP THREE Ramping Up the Possibilities. CHAPTER 19 Did You Know that There Are a Lot of People Trading Options? CHAPTER 20 Did You Know You Can Actually Buy and Sell Your Options to Other People ? CHAPTER 21 Did You Know You Can Vastly Increase Your Return on Investment? CHAPTER 22 Did You Know that You Never Want to "Make As Much Money As Possible"? CHAPTER 23 Best of All: Did You Know You Can Combine Option Instruments? STEP FOUR Getting a Few Basics in Place. CHAPTER 24 More Time Travel. CHAPTER 25 What Is an Option Worth? CHAPTER 26 Strike Three. CHAPTER 27 Choosing Stocks. CHAPTER 28 Reading the Tea Leaves (1). CHAPTER 29 Reading the Tea Leaves (2): Stock Trends. CHAPTER 30 Getting the Final Pieces in Place. CHAPTER 31 Fun, Fun, Fun! STEP FIVE Understanding Two Basic Option Trades. CHAPTER 32 Insuring Your Investment. CHAPTER 33 Shorty Heaven: Selling Your Way to Profits. STEP SIX Moving from Option Trading to Spread Trading. CHAPTER 34 Trading in Surround Sound: The Fundamental Spread Trade. CHAPTER 35 The Two Basic Ways to Make Money in Spread Trading. STEP SEVEN Understanding Bullish Spread Trades. CHAPTER 36 The Bull Call. CHAPTER 37 The Bull Put. CHAPTER 38 Bull vs. Bull. STEP EIGHT Understanding Bearish Spread Trades. CHAPTER 39 The Bear Call. CHAPTER 40 The Bear Put. CHAPTER 41 Bear vs. Bear. STEP NINE Getting Started. CHAPTER 42 Lifting the Fog. CHAPTER 43 The Launch. APPENDIX Answers to End-of-Chapter Reviews. Index.