Options Made Easy Your Guide to Profitable Trading 2nd Edition
Options trading offers unparalleled opportunity for rapid profit, but most options guides are difficult to understand and even harder to use successfully. Not this one. Options Made Easy has earned a worldwide reputation for simplicity, clarity, and practical value. In this thoroughly revamped Second Edition, renowned options trader Guy Cohen delivers even more of what makes this book so valuable: better graphics for easy visual learning, updated hands-on examples that walk step by step through real trades, and the clearest plain-English explanations of trading techniques you’ll find anywhere. Unlike its competitors, Options Made Easy, Second Edition shows you how to design your own trading plan for high probability trades and consistent profits, offering proven strategies you can begin using right now. Best of all, Cohen teaches through easy-to-understand charts and graphs, not complicated math! Coverage includes: filtering for moving stocks; selecting the right strategy for each situation; bull call and put spreads; covered calls; straddle/strangle; volatility and sideways strategies; trading and investing psychology; and much more. This edition also contains a completely revamped introduction to the Greeks– the standard sensitivities to options risk characteristics that every trader must know.
User Ratings and Reviews
4 Stars Review of Options made Easy
I have read about 1/3 of the book and have learned a lot. Great book for a novic elike me. It teached you about Options and also about the market in general. Easy good explanations.
5 Stars Great Book to bring you up to speed
If you are new to options, this will be a good start. I own over 40 books on options and this was one of the first that I purchased and I still peruse it from time to time.
4 Stars A Good Start
This book is a very good introduction to options if you are new to the stock market. It is written in a very friendly tone, easy to understand and covers the basics of fundamental and technical analysis of the underlying security. It even covers such basic things as types of orders (limit, market, stop etc.). It familiarizes the reader with the major U.S. economic indicators to watch, like Consumer Price Index, The Employment Report, etc. It has The Economic Calendar, which gives the dates when the economic indicators are being published. I have found this calendar very useful.
The book covers only the most basic options trading strategies. If you need something more advanced, like “Short Iron Butterfly”, the author has another book, “The Bible of Options Strategies: The Definitive Guide for Practical Trading Strategies”.
While covering the basic strategies, the book fails to address an important technique of selling puts as a way of buying the underlying security. Warren Buffett obtains most of his stock holdings through selling puts. He got most of his Coca-Cola Holdings this way, and, recently, Burlington Northern Santa Fe. If you are interested in this technique, you can find it in “Options as a Strategic Investment” by Lawrence McMillan, chapter 19, or there is a special book “Using Options to Buy Stocks” by Dennis Eisen.
If you are already familiar with the stock market and just want to know about options, I can recommend “Trading Options for Dummies” by George Fontanills, which doesn’t explain about the fundamental analysis or order types.
The advantage of the reviewed book is that it is relatively small: you will be able to finish it quickly. If you want something more comprehensive and as friendly as this one, I can recommend “The Options Course” by George Fontanills, the same author who wrote “Trading Options for Dummies” above mentioned.
5 Stars If you don’t want to read this book, don’t trade options
Nowadays options are all the rage. Most of us who are less than encouraged by the economics of working for a living and making other people rich are getting the message that you don’t have to, and are taking a second look at the stock market. And that’s as it should be. Sooner or later we get introduced to options as a way of reducing the risk of investing and trading. Unfortunately, minimizing risk remains an illusion unless you know what you’re doing. It means learning from someone who not only knows what he/she is doing, but also someone who KNOWS HOW TO TEACH. That’s a tall order, and it immediately eliminates about 90% of mankind. Knowing how to teach is not an art one acquires by having a command of one’s subject. Unless you’re a born teacher, you’ll never be able to do more than read from someone else’s book, or repeat hackneyed mottos and slogans. Happily, the author if this book belongs in that select class of born teachers.
Why do I say this? Because I’m not far from being a beginner in options myself. And I’ve suffered through a great many books which, by their title, create the impression that a beginner can learn from them. (If you’re fortunate enough to acquire one of these books from a dealer who accepts returns with a smile, you can then hope that the dealer will carry only the best books. True, perhaps, in some other world, but not in this one.) “Options Made Easy” is such a book, and, unlike many others, it makes good on its title. There’s arguably no other trading discipline in which it’s so important to get clear on the basics–terminology and concepts, than options. And that’s what too many authors and instructors don’t seem to understand, since they don’t remember being beginners themselves. For example, the standard approach is to tell students that when you BUY a CALL option, you’ve got a right to BUY a stock; when you SELL a CALL option, the person who BUYS the CALL option has a right to BUY a stock, which you have a duty to SELL, and so on for BUYERS and SELLERS, CALLS and PUTS. Pretty soon the beginner finds himself/herself lost in a thicket of BUYS and SELLS, CALLS and PUTS, and easily forgets what it is that’s being bought and sold. and by whom. Then, to make matters even more complicated, since one has to understand risk profiles for each of the combinations. a lot of numbers get tossed into the options soup. Armed with this level of knowledge, a student is hardly equipped to begin reading and making sense of an option chain, let alone place real trades. And it only gets worse when one is introduced to the more compex option strategies. It’s like a pianist trying to play Chopin and having to try to remember where middle C is on the piano. To be sure, seasoned option traders keep things straight, but no one is born a seasoned option trader. And what the beginner is looking for is a book for beginners. And beginners require good teachers. (I really don’t care whether the book’s dust jacket tells me that the author has been working in the Chicago Board of Options Exchange since he/she was 10, if he/she doesn’t know how to teach. The fact is that a lot of “authors” are pedagogically challenged, and have no business writing books.)
A few authors try to remove some of the ambiguity by using the terms “holder” and “writer” for the people who are buying and selling options, respectively. This is OK as far as it goes. Guy Cohen has devised a terminology which goes a very long way toward resolving the ambiguity of options terminology. He introduces it on p. 24 of “Options Made Easy.” (Being an unusually slow study myself, I didn’t understand what he was trying to do. So I sent him an e-mail, to which he graciously and quickly responded. It’s all clear now.) He then links this basic symbolism to a risk-profile chart for the basic option buy-sell combinations. Later on, these basics are applied to the more complex options strategies. It’s all quite ingenious. It’s hard to overemphasize the value of such an approach, especially when you understand that using options is all about risk management. The book is replete with risk-profile charts of increasing complexity, and each is accompanied by an illustrative number-crunching example. (What Guy Cohen needs to do now is publish a workbook to accompany the text, in which he compels the student to work through a variety of problems.)
“Options Made Easy” has a chapter on Fundamental Analysis and one on Technical Analysis. While each of these chapters offers a lucid introduction to its subject, the reader should be aware that each of these disciplines is complex in itself. And since, once you buy or sell an option, everything turns on the behavior of the underlying stock, there’s no getting around the fact that you’ll have to learn how to pick the underlying stock, and then track its fate for as long as you’re in the option trade. It pays, therefore, to get comfortable with both fundamental and technical analysis (especially the latter).
My only (constructive) criticism of the book is that the option-chain examples are a bit hard to read. Also, the technical charts could be improved to show up a little clearer. But these problems can be remedied when the author brings out an updated edition of the book (which I hope he will soon). Some readers have found typos, but as yet, I haven’t.
1 Star very displeased!!
No Quality in this item. A lot of missing pages. whats with this? There are pages with great info. What is this doing to the author? Please strive to get it right or dont sign your name to it.
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