Get Rich with Options: Four Winning Strategies Straight from the Exchange Floor (Agora Series)
A detailed guide to successfully trading stock and commodity optionsAfter numerous years as an options market-maker in the trenches of the New York Mercantile Exchange, few analysts know how to make money trading options like author Lee Lowell. Now, in the Second Edition of Get Rich with Options, Lowell returns to show you exactly what works and what doesn’t.Filled with in-depth insight and expert advice, this reliable resource provides you with the knowledge and strategies needed to achieve opt
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Good, practical material,
I’d give this book 5 stars for its practicality, but there are a few flaws. Many options books present a Chinese menu of exotic strategies, confusing the reader and probably causing him to lose his money quickly. This book distills all of these strategies down to 4 of the ones that are the most practical for investors and traders, and that in my experience work well in real life. I was put off by the awful title, which is not the main point of the material in the book at all, but I guess the publisher wants to attract some of the get-rich-quick crowd. The clarity and emphasis are uneven. The fifth “bonus strategy” would’ve best been left out, because most traders would consider it extremely dangerous. On balance, the book’s emphasis on profiting from option time decay by using stragegies that are safer than stock ownership greatly outweighs these flaws. You can waste thousands of dollars on options classes and end up with less useful material than is contained in this book.
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|Good, but incomplete guidance/advice,
This book cuts to the chase in presenting four winning options strategies (see book description above for all 4, which you can lookup), which will make beginners happy as there’s too much confusing options advice out there. But it falls badly short on two absolutely critical aspects of trading: exits, and position sizing (or money management).
For example, Lee presents option credit spreads as his favorite strategy, and it’s certainly a powerful strategy, but of his 13 example spread trades, not one was a loser, or close to a loser! There’s very little treatment of when and how to get out, nor how many spreads to put on given one’s capital – areas where I really wanted to hear his analysis, because he has survived in the markets for a while. That’s a huge deficit, because the potential risk:reward ratio of spreads is usually at least 4:1. So even though the odds of a winning trade can be greatly in your favor, the overall expectancy (read Van Tharp if you don’t know what expectancy is) can kill you. You still need a plan to get out or at least hedge losses, and this book has little to say about that.
Also, implicit in his book is that you’re already good at technical analysis and can make market calls with accuracy better than chance. So, you need an overall working strategy before you enlist the specialized options tactics he presents.
In the end, this book’s value comes in telling you what really works for options, but not in sufficient detail that you can make a living at it. So start out small, and check out sites like elitetrader where people with experience can share things like exits and position sizing for spreads and other options positions in greater depth.
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|Simple option strategies,
I picked this book up a month back and tried to implement some of the strategies. The author is right in that Option Selling is the key as I have seen option buying just expire worthless (except Deep in the Money calls).
Pros of the book:-
1) Boils down the strategies to 4 key ones. It’s simple and doesn’t overwhelm the new option trader with the innards of the “greeks”, how options are priced etc.
2) Another benefit is that it points to good tools to use while analyzing your positions. Dont ever trade without the “tools of the trade”.
Cons:
1) No strategy on how to pick the trade – There are many examples that is right in hindsight but not enough explanation on why he chose that trade in the first place. No example on when things went wrong. I think that’s key to really making money in options…how to pick the right trade to put in else you will just burn yourself.
2) No options repair strategies – Ties in with the 1st comment. If the trade you put in went against you, how to repair it. Author does mention rolling up but there is not enough explanation for someone new at options on how to do it.
So how to overcome the cons…. buy some more classic books to round out your knowledge.
For the intermediate options trader, “McMillan on Options” by Lawrence McMillan is a good buy. Goes deeper into why and how options work and covers all the strategies here.McMillan on Options, Second Edition (Wiley Trading)
For advanced option information, check out Option Volatility & Pricing: Advanced Trading Strategies and Techniques by Sheldon Natenberg.Option Volatility & Pricing: Advanced Trading Strategies and Techniques
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