Table of Contents
Part 1 Introduction 3
Overview: 3
Investment Choices: 9
Basic Concepts: 14
Overview of the Stock Based Option Trading Strategy: 21
Part 2 Understanding Investment Basics and Terminology 26
The Internet is a Game Changer: 26
Important Investment Metrics and Terminology: 27
Specific Option Trading Terminology and Concepts: 30
Selling a Put Option: 33
Selling a Call Option: 37
Bringing the Strategy Together: 39
Common Trend Analysis and Charting Concepts: 43
Greeks: 48
Part 3 Generating Income by Selling Puts and Calls 52
A Conservative Multifaceted Approach: 52
Examples of Generating Income from Selling Puts: 55
How to Increase Your Yield on Owned Stocks, by Selling Covered Calls: 61
How to Evaluate a Trade and Determine Your Strike Price and Expiration: 68
How Much Time Do You Have to Dedicate to Execute the Strategy: 73
When to Close Positions Early and Redeploy Capital: 78
Part 4 Generating Income Selling Spreads 85
More Leverage, Higher Returns and More Risk: 85
Vertical Put Credit Spreads: 86
Discipline and Creating Your Trading Strategy Statement: 89
Recovery Strategies: 94
Other Types of Option Trades: 98
Part 5 Addendum 104
Glossary of Terms: 104