How To Make Money With Stock Options

Introduction

Current Attitudes Toward Stock Options

Stock options have a bad name. Many investors refuse to have anything to do with them, having heard that they are “speculative.” For example, in some lawsuits judges and jurors take it for granted that if a stockbroker or investment advisor engaged in stock option transactions for an investor, it was automatically a “speculative” investment.

In the following pages I hope to convince you that many stock option strategies are not speculative, and are less risky than the traditional purchase and sale of stocks. The one difference is that stock option strategies are more difficult to understand, and it takes more time to learn the vocabulary. For this reason, part of this book deals with understanding the vocabulary of stock options.

But this is not really a book about options. It is a book about risks in the options market. There are already a number of books that explain options, generally in much more detail than options are explained in this book. The Chicago Board Options Exchange (CBOE) pamphlet on options, which is routinely sent to investors who trade in options, contains a lot of valuable information on options and examples of various option strategies.

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