Basic Options Trading: Options Strategies For Beginners
One of the top contributors to the financial website, Seeking Alpha, Rocco Pendola covers the most basic options strategies in this tightly-packed, accessible eBook. With a focus on covered calls, long calls, long puts and cash-secured put writing, Pendola argues that options, generally, present no more risk than stocks. In fact, when used as part of a relatively conservative game plan, options can mitigate risk. After reading this eBook, even new investors will have developed an understanding o
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Perfect Options Book for Beginners,
This book does exactly what the author intended it to do – provide a starting point for beginning option traders. Mr. Pendola was asked by a number of individuals that read his articles on Seeking Alpha to provide them with an easily understandable book on basic option fundamentals and strategies. After reading his book on my morning commute I believe he has more than accomplished his goal.
The book covers options basics, covered calls, buying naked puts and calls and selling cash secured puts. For the price, the easy read, and the options information he is able to get to the reader in short order, this book is a great starting point for someone interested in using options as a way to potentially increase their income.
One additional note concerning a few of the other reviewers. Mr Pendola took an bearish view of a widely followed stock (Sirius XM) on the Seeking Alpha website in a few of his articles. Because of his contrary opinion he received continual personal insults from a number of those bullish on the stock who disagreed with his opinion. It appears some of those have followed him to Amazon. Mr Pendola has written and continues to write articles which are posted on the Seeking Alpha website so if someone is uncertain about buying this book go read a few of those articles and then decide. Then again, we’re only talking about 9 bucks.
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|Ideal, concise book for beginner-intermediate investors,
To make this review more helpful, I figure I should I give a bit of background about myself. I am a 24 year old who started trading and following the market daily about 3-4 years ago. Moreover, I recently became more interested in options about a year ago and had been relatively successful, primarily through the use of selling puts (well described in the book). As someone who is quantitatively driven, I tried more complex option strategies through a simulated account but was not nearly as confident or successful with them and have yet to employ these strategies for real.
As I can assume was the case for many others, I discovered Rocco and his articles through Seeking Alpha. In particular, his articles regarding the use of options to double a simulated portfolio over a month, caught my eye. I have learned a lot through his articles and have done quite well using his research/insight as part of my analysis for various tech stocks. After reading his articles on Seeking Alpha, I became more comfortable with taking long positions in puts and calls. I enjoyed reading this book as it builds on the strategies his articles go over on Seeking Alpha and goes into the detail required for many of us. Personally, I enjoy his writing style and will recommend it to others I know looking to get into options trading.
However, just like investing in general, you should do your own research. Make sure you read the preview for the book and maybe read an article or two of Rocco’s from Seeking Alpha. After looking over the negative reviews for this book, I can only assume that these customers did not do their research or have some personal issue against Rocco stemming from the Seeking Alpha message board (fairly common situation). If you read what I suggested above and are still interested, then you won’t be surprised by the book’s contents and should enjoy it too.
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|A simple, yet informative read,
Basic Options Trading: Options Strategies For Beginners by Rocco Pendola is not a get rich quick read. If you are looking for a book to offer you outrageous guarantees about fast cash and then retiring along the Mediterranean this is not the book for you. However, if you are looking for a sensible, down-to-earth guide about the basic principles of options investing then Pendola’s eBook is a good start. The writer focuses on defining the concept of basic options, not giving advice as to how to make a quick buck. He writes, “I want you to be able to use this book as a logically-flowing roadmap to understanding the very basics about options and turning that knowledge into a workable and relatively safe options strategy. Think of this as more of a workbook or a progression of concepts, thoughts and ideas, rather than a traditional text.”
Pendola’s approach to what many people find complicated is to breakdown explanations into simple and manageable illustrations. If the thought of trying to figure out the square root of 9 freaks you out, don’t worry, most of his examples involve basic, simple math. Put away your calculator. His overarching goal is to make understanding options uncomplicated. Have you ever wanted to know the terms: buy to open, sell to close, sell to open, buy to close, out-of-the-money, in-the-money, and at-the-money. If you answered yes, this is the book for you.
The book is divided into five sections. Each section builds upon the information you learned in the previous. The first section provides the reader definitions and concepts of basic options. Complicated options are not discussed. Remember, this book is for beginners, those somewhat familiar with the terms and who want to learn more to build up their comfort level. Second, he explores his belief that options should be considered as an investment. He writes, “It’s little more than a misnomer that options have no place in the portfolios of new, ardent buy-and-hold or even conservative investors. In fact, I argue that you hold yourself back by not using options in a variety of, albeit, relatively basic ways.” The following three sections discuss covered calls, long calls and puts, and cash-secured puts respectively.
As I read this book, one thing that I found comforting was that the author frequently warns his readers not to do too much. In today’s world, many people are leery with claims that risk will pay out as long as you have a lot of money in the game. He feels the opposite. “Simply put, many humans have an aversion to the notion of doing more with less, while failing to acknowledge the potential pitfalls of trying to do more with more.” Pendola is cognizant to warn readers that caution and knowledge will get you results. He also advises to only risk an amount of money in which you can afford to lose. He believes the best type of investor, is a disciplined one who is informed, patient, and knows his or her limits -“(m)ost investors, namely relatively small ones, should never venture beyond the most basic options strategies.”
I give this book 4 out of 5 stars. It is a simple, yet informative read.
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