How I Trade Options: Beat Risk and Reap Rewards Like a Pro! (Wiley Trading) - Hardcover

Über die Autorin bzw. den Autor

JON NAJARIAN ("Dr. J") is President of Mercury Trading Co. in Chicago, Illinois, one of the largest option specialist firms in the United States. He has traded on the Chicago Board Options Exchange (CBOE) since 1981 and is an active trader on and off the floor. He is also chairman of O. N. E. Financial News and has served on the board of the CBOE. He hosts a financial segment on FOX Morning News and is a frequent speaker at seminars nationwide.

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Wiley Online Trading For A Living

Beat Risk and Reap Rewards Like A Pro!

The Compelling True Story of How a Top Market Maker Built a Successful Trading Business

Praise for How I Trade Options

"To much of the outside world, trading appears to be as incomprehensible as rocket science. What Jon Najarian has done in this engaging and very readable book is to 'demystify' the world of options for both the aspiring trader and the retail investor. How I Trade Options is a rare opportunity to look over the shoulder of this experienced options trader, teacher, and lecturer." -Lewis J. Borsellino, CEO/Founder, www.TeachTrade.Com; Author, The Day Trader: From the Pit to the PC

"How I Trade Options gives retail investors who have little or no prior knowledge the insight into how options work and how to use them effectively and responsibly. For those who want to learn about options, this is a rare opportunity to learn from a master trader. Najarian shows commitment to educating investors on the use of options to enhance their portfolios." -Rance Masheck, President, Quantum Vision Inc.

"Not only is Jon Najarian a Supertrader, he is a Superteacher. I owe much of my good fortune to Jon Najarian. I learned more from him than I had learned in an entire decade-plus it was fun! Jon's abilities to make his profitable trading strategies understandable are sure to make How I Trade Options a must-have tool that every option trader will want to own." -Don Fishback, Developer of the Fishback Option Pricing Model

"Jon Najarian is a world-class options trader and a world class options educator. His crystal clear explanations of such strategies as vertical spreads empower the average investor to participate in attractive options approaches that, until now, have been dominated by professional traders." -Bernie Schaeffer, Chairman and Chief Executive Officer Schaeffer's Investment Research, Inc.

Please visit our Web site at www.wileyfinance.com

Aus dem Klappentext

When Jon Najarian embarked on a career in the world of market making, he went from playing with the Bears to running with the bulls. In this chronicle of his trading evolution, the former middle linebacker for the Chicago Bears focuses on the key ingredient for his market success-learning to control risk.

From achieving speedy victory to coping with some enormous losses to building his own business, Najarian reveals here how he successfully trades the market with options traders, showing investors how to trade like the pros by:
* Honing self-discipline
* Handling volatility successfully
* Grasping puts, calls, and spreads
* Seizing opportunities and adapting strategies to changing times

Looking to Najarian's compelling personal-and highly educational-story as an example, stock, futures, options, and bond traders, as well as individual investors, will learn to limit risks, be aware of and avoid potential pitfalls-and trade options like a market maker.

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Chapter 2 - The Marketplace

The floor of the Chicago Board Options Exchange (CBOE) is a hybrid environment. Like its parent exchange, the Chicago Board of Trade, the options-trading floor has pits where traders in colored loose-fitting jackets call out their bids and offers. But electronic technology has made strong in-roads onto the floor. Large, electronic screens flash above the pits - or posts, as they're also called - where stock options are traded. These big screens bear a close resemblance to the departure and arrival monitors at airports. But the technology doesn't end there.

In the pit, the market maker, whose job is to make a two-sided market for put and call options, is more than likely holding court around a cluster of computer screens that display the orders to be executed. Traders with handheld computers scan their screens for the latest analysis of bids and offers. Headsets and computers abound. Traders have every gadget from Palm VII's, cell phones and beepers, to strings of batteries to run everything.

One trader passed me on the floor the other day wearing a headset (a kind of limited-range cell phone that only works on the trading floor) and a computer in a ballistic nylon case slung over his shoulder. In his hand, he clutched a Palm VII and a calculator. All he was missing was a satellite dish on his head.

Technology will extend the life of our trading floor and our Pit, as other exchanges debate the futures of open-outcry. Even though purists like me have been irked at times by "Gameboy traders" - so named for the handheld computers they use that market makers resemble the popular video game hardware-technology is our future. As I stated in the opening chapter, technology will speed the flow of customer orders to the floor and technology will allow firms to hire legions of young, inexperienced traders who are willing to take direction from a computer screen.

To be honest, the hybrid trading floor, where traders and computer screens commingle, is fitting for a derivative marketplace such as options. Think about it. Our stock and trade is the next generation of financial instruments. We trade speculative instruments that, in virtually all cases, no one wants to buy and hold (unlike those shares in the electric company your grandfather bought and put in the desk drawer for 30 years).

But when I buy an option, I do not own a piece of a company or a bond that will pay me interest. I own the right to own or sell something. In form, options are a speculative opportunity in case a stock price does, indeed, move your way. And in function, options (at least when they're bought and not sold) act as a kind of insurance policy potentially to limit risk.

Within this marketplace, there are key players, each of whom plays a vital role in making an efficient and liquid market. There is the market maker, who provides a constant, continuous market with a bid and ask spread. There is the broker who executes customer orders on the floor, and the local traders who speculate on market movements. Behind the scenes, in trading offices around the country, are professional traders who sit at computers off the floor, as I do the majority of my days. As an owner of four trading firms and a partner in a Chicago-based brokerage operation, I am trading on the floor less and less. But I trade on a regular basis in either our 15th-floor proprietary trading office adjacent to the Options Exchange or help manage our option fund, across the street in a room filled with computer screens.

To understand options, I believe you must understand the role of each of those players, and where you-as a professional trader or a retail speculator -fit into the game.