Kenneth Trester - The Complete Option Player

Revised and Updated

By Kenneth R. Trester

Institute for Options Research, Inc.
P.O. Box 6586, Lake Tahoe, NV 89449
Internet: http://www.gooptions.com

Copyright Kenneth R. Trester, 1977, 1992, 1998, 2002, 2010

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the publisher. Printed in the United States of America.

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.

From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers.

We advise all readers that it should not be assumed that present or future recommendations will be profitable or equal the performance of previous recommendations. The reader should recognize that risk is involved in any option or security investment, and they should not assume that any formula method, chart theory or philosophy will result in profitable results or equal past performances. This publication should only be used by sophisticated investors who are fully aware of the risks in options trading. A reading of the options booklet prepared by the Options Clearing Corporation is recommended before trading options. No solicitation to buy or sell securities or options is implied. The information contained herein has been obtained from sources believed to be reliable, but there is no guarantee it is accurate or complete and should not be relied upon.

Cover design by Pearl & Associates
Illustrations by Tim Sheppard
Text design by Greg Sammons, Sierra Gamma Inc.

First Edition, hardcover, 1977seven printings, titledThe Compleat Option Player
Second Edition, paperback, 1992three printings, titledThe Compleat Option Player
Third Edition, paperback. 1998
Second printing June, 1998
Third printing July, 1999
Fourth printing March 2000
Fourth Edition, paperback, 2002
Second printing October, 2003
Third printing October, 2004
Fourth printing Janurary 2005
Fifth printing September 2005
Sixth printing October 2006
Fifth Edition January 2010

Trester, Kenneth R.

The complete option player / Kenneth R. Trester.5 h ed.

p. cm.

Includes index.

Originally published as The compleat option player.

ISBN: 0-9604914-5-7

1 Options (Finance) 2. Options (Finance)Computer network resources. 3. Internet (Computer network) I. Title. II. Title: Complete option player

Published by:
Institute for Options Research, Inc.
P.O. Box 6629
Lake Tahoe, NV 89449

To Merle
She helped make an impossible dream possible.

Also by Kenneth R. Trester
The Option Players Advanced Guidebook
Secrets to Stock Option Success
101 Option Trading Secrets

Part II: Winning Through
Option Writing Strategies

Why options? Options are that rare investment that meets the needs of both the speculator and the conservative investor. Options can provide lottery-like returns of more than 10,000% and you can enter this game for a small price tag. Options can provide the investor with important insurance not available anywhere else, and options can provide a lot more income to your portfolio.

But, what I like best about options is that you can mathematically measure the true worth of an option unlike stocks, bonds, gold, silver or other investments assets.

Many analysts claim that the small investor cannot beat the options markets, but the results of my newsletter recommendations over the past twenty seven years suggest that the options game is quite beatable, even for the small investor who risks very little. Since I first started writing The Trester Complete Option Report, we recommended almost 800 options for purchase in the newsletter. My objective over the years was to select options that had the potential to hit a home run, and yet were low-priced, usually priced under $100 (1), and sometimes priced as low as $12.50 (1/8) to control 100 shares of stock. The options that were recommended were always undervalued according to my mathematical pricing models. The theoretical track record for these eight hundred recommendations showed consistently high and sometimes spectacular profits. In 1985, Profit Logic, an independent newsletter advisory rating service credited The Trester Complete Option Report with a 1,500% return.

From June 1989 to December 1990, 44% of all recommendations showed a profit, a much better percentage than our record in the past, as the following chart shows:

The track record for the years 2000 to 2008 are from the Put and Call Tactician. That theoretical track record is calculated differently and is not annualized.

Our net profit is figured using the same guidelines we set forth in every issue of the newsletter, and that weve used in every review since the newsletter was first published.

A portfolio that invested $1,000 in each position beginning in June 1989 would have returned a gross profit of $152,849, before commissions of $30 per trade (at a deep discount broker). After commissions, net profit would have been $145,344. A portfolio starting with $16,000 would have realized a theoretical 19-month return of 914%.