Mark Larson - Big Money, Less Risk: Trade Options

Table of Contents

Other Books by Mark Larson

Disclaimers

Copyright 2008 by Mark Larson

Published by John Wiley & Sons, Inc., Hoboken, New Jersey

Published simultaneously in Canada

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Foreword

The world of options is often daunting and confusing on many levels. First, the terminology is highly specialized with a lot of cross-over use of expressions, especially when describing strategies. Second, quantitatively evaluating risk is elusive because the possible range covers the entire spectrum when trading options.

Mark Larson has compiled a book that features a series of common sense option strategies every trader should master. He explains these in straightforward language and expands examples with graphics, definitions, and sidebars. Larson has made the mastery of a few valuable concepts easy for every investor and trader.

Anyone who has tried to read books explaining how to trade options may be discouraged by the complexity and technical jargon of this industry. But rather than giving up, traders need to go through Larsons book. The options market has grown to become a major factor in the market today, and this trend is going to continue into the future. Tomorrows successful trader will include options as a matter of course, to enhance profits, hedge risks, and protect profits in stock and other positions. Options have been available to the public only since 1973. That year, only 1.1 million contracts were traded. In 2007, according to the Chicago Board Options Exchange (CBOE), nearly 2.9 billion contracts were traded. This includes options on stocks, indices, futures, and mutual funds. The expanse of the market itself has broadened in recent years.

Perhaps the greatest cause for this expansion has been the Internet. Today, you can trade options without a stockbroker. You can use online discount services, which enable you to complete a round-trip trade (buy and sell) for less than one-quarter of a point in trading fees. This is a vast improvement over the past. When you had to use a stockbroker to execute an options trade, it was much more expensive; and the time delay made many strategies ineffective or impractical. Making matters worse, many stockbrokers, although licensed to execute options trades, really didnt understand the market.

With Mark Larsons book, you gain a good start in the market of options, where you can leverage your capital, control the level of risk, and use a range of strategies to manage your portfolio. There is nothing new about the options concept, but for the modern American investor or trader, the application of the principles behind options make trading more flexible than ever, and potentially more profitable as well. Larson shares some insider secrets and provides valuable tips for using options effectively, picking the best and safest strategies, and coordinating option selection with a few basic technical indicators to help you better time your trades.

Dont let the options market intimidate you. Rather, look at this market as an opportunity to beat the averages, improve portfolio returns, and cut losses. There are so many ways that options can be put to work for relatively little investment that virtually every trader will benefit from Mark Larsons book.

Michael C. Thomsett Best-selling author of Getting Started in Options, Mastering Technical Analysis, Mastering Fundamental Analysis , and over 40 other trading and investing titles

Preface

The preface of a book is often the second place one goes after reading the inside cover of the book. If youre reading this section and havent yet purchased this book, I can assure you that Big Money, Less Risk: Trade Options will be a book you will have a hard time putting down. It will also be a book that will teach you things about the stock market that you may not have known existed. Im not talking about why the stock market goes up or down; Im talking about how to make money when it goes up or down. Im talking about investment strategies that allow you to have huge returns on your money with the use of very little money. Im talking about how to purchase good stocks at discount prices. Im talking about placing option type trades that allow you to be wrong and still make 10, 20, 30% return on your money in one month.