The Complete Book of Option Spreads and Combinations / Wiley Trading Series (PDF)

Get a handle on option spreads to hike profit and squash
loss

The Complete Book of Option Spreads and Combinations is
the definitive educational resource and reference guide for using
option spreads and other common sense option strategies. This
useful guide shows readers how to select the right strategy for
their market outlook and risk/reward comfort level by describing
the inner workings of each strategy and how they are affected by
underlying market movements, implied volatility, and time decay.
Even more importantly, readers will understand where each strategy
performs well, and the market conditions where each should be
avoided. Once the proper strategy is selected, readers will learn
how to identify the best options to use based on "moneyness" and
time to expiration. The companion website features tools including
an option pricing tool and implied volatility calculator to help
all traders implement these concepts effectively.

There are many different types of spreads, and while less risky
than other option strategies in general, they are more complex,
with more variables to monitor. This guide serves as a handbook for
the trader wanting to exploit options to the greatest possible
benefit.

* Generate monthly income by selling covered strangles

* Use call spreads to recover from a losing stock position

* Protect an existing stock position using put diagonals

* Discover the best strategies for directional market plays

Option spreads are a great tool for traders who would rather be
an option seller but who need to limit their risk. The Complete
Book of Option Spreads and Combinations identifies those
strategies that benefit from option erosion but that limit
risk.

If managed properly, spreads can provide both novice and
experienced investors with the potential for a large return while
limiting risk. Electronic trading platforms and reduced brokerage
commissions have increased option spread trading, which should
occupy a spot in every savvy investor's toolkit. Comprehensive and
authoritative, The Complete Book of Option Spreads and
Combinations provides a valuable manual and lasting
reference.