Options in volatile markets : managing volatility and protecting against catastrophic risk / Richard Lehman, Lawrence G. McMillan.

Format:

Book

Author/Creator:

Lehman, Richard, 1948-

Contributor:

McMillan, L. G. (Lawrence G.)

Lehman, Richard, 1948-

Series:

Bloomberg financial series.

Bloomberg financial series

Language:

English

Subjects (All):

Stock options.

Investments.

Physical Description:

1 online resource (226 p.)

Edition:

2nd ed.

Place of Publication:

Hoboken, N.J. : Bloomberg Press, 2011.

Language Note:

English

System Details:

text file

Summary:

"Traditional thinking about investment has been thrown on its head in the wake of the financial crisis. Many investors no longer accept the idea that diversification reduces risk and the stock market provides the best long-term returns. With global markets increasingly interlinked, markets tend to move in concert, reducing the benefits of diversification. And given the gravity of today's economic problems, many question whether the stock market will soon continue its inexorable march higher. In Options in Volatile Markets, Lehman and McMillan provide investors with strategies to generate double-digit returns and to protect against market crashes. The new edition discusses the changing investment environment; explains how to use options with ETFs; and shows how build "catastrophic" protection into a portfolio. While the core strategy remains covered call writing - selling a call option on a stock the investor already owns - the authors discuss other strategies to capitalize on high-flying stocks. Most importantly, for investors looking for high returns but fearful that the market might crash, the authors discuss low-cost options strategies that effectively provide insurance for a portfolio"-- Provided by publisher.

Contents:

OPTIONS FORVOLATILEMARKETS; Contents; Preface; INTRODUCTION The "New Normal" in Equity Investing; CHAPTER 1 Option Basics; What Are Options?; Exercise and Assignment; Positions; How Options Are Traded; Options in Your Account; CHAPTER 2 Option Pricing and Valuation; Option Premium; Theoretical Value; Time Value; Volatility; Interest Rates; Dividends; Calls versus Puts; Option Skews and Anomalies; CHAPTER 3 The Basics of Covered Call Writing; Requirements for "Valid" Covered Writes; Risk/Reward of a Covered Write; Calculating Potential Returns; Major Factors Affecting Call-Writing Returns

Covered Writing as an Ongoing StrategySumming Up Covered Writing; CHAPTER 4 Implementing Covered Call Writing; Follow-Up Actions; Behavioral Issues; Differing Approaches; Selecting Calls to Write; Risks; Basic Tax Rules for Options; Summing Up Implementation; CHAPTER 5 Advanced Call-Writing Techniques; Writing Calls on "Hot" Stocks; Tax Deferral Strategies; Covered Writing on Margin; Covered Writing against Securities Other Than Stock; Partial Writing, Mixed Writing, and Ratio Writing; Put Writing; Expiration Games; Option-Stock Arbitrage; CHAPTER 6 Basic Put Hedging; Put Hedge Basics

AdvantagesDisadvantages; Behavioral Implications; Put Hedge versus Covered Call; Hedging against Catastrophic Risk; CHAPTER 7 Advanced Hedging Strategies; Put Hedge Follow-Ups; Using Put Spreads to Hedge; Collars; Conclusions on Protective Option Strategies; CHAPTER 8 Options on ETFs; ETFs in a Nutshell; ETF Options; Covered Call Writing on ETFs; Our Put Hedge and Collar Study on SPY; Appendix: Partial List of ETFs with Listed Options; CHAPTER 9 Volatility and Volatility Derivatives; What Is Volatility?; Using VIX as a Market Indicator; Volatility Futures; Variance Futures

The Behavior of VIX FuturesVIX Options; VIX Option Strategies; The Future; Acknowledgments; About the Authors; Index

Notes:

Includes index.

Rev. ed., previously published under title: New insights on covered call writing by Bloomberg Press in 2003.

Related Work:

Lehman, Richard, 1948- New insights on covered call writing.

ISBN:

9786613204042

9781118102664

1118102665

9781283204040

1283204045

9781118531518

1118531515

9781118102640

1118102649

OCLC:

754714899