Conservative Options Trading: Hedging Strategies, Cash Cows, and Loss Recovery - Paperback

by Michael C. Thomsett (Author)

The world of options is considered high-risk by many. At its original options treading in the modern era began in the early 1970s when the first listed calls were offered on a short list of companies; a few years later, put trading was added.

Since this time, options trading has become available on most companies on the large public exchanges. However, the high-risk reputation of options has persisted through the years, even as dozens of new and often conservative strategies have been introduced. Today, the best use of options is not to speculate on price movement, but to hedge market risk in equity portfolios. Many strategies can combine hedging with income, establishing advantageous circumstances for risk-averse traders. It is possible to apply several strategies to reduce risk and in some instances, to eliminate market risk completely.

This book examines the many ways this can be accomplished, based on options for three highly-rated companies. These are qualified as a first step by exceptionally attractive fundamental attributes and trends: Higher than average dividend yield with dividend increases over at least 10 years; a range of moderate price/earnings ratios each year; growing revenue, earnings and net return; and level or declining long-term debt as a percentage of total capitalization.

Author Biography

Michael C. Thomsett is author of numerous books on the topics of technical analysis and charting. His published works include professional and trade books from Wiley, FT Press, Amacom, and Palgrave Macmillan, among others. His best-selling book Options (10th edition, DeGruyter) has sold over 300,000 copies and has been in print since 1989. The author is a frequent speaker at investment trade shows and offers online coaching services. He considers the topic of momentum as one of the most overlooked and least understood in the science of technical analysis. His educational website is https: //TheMoneyCraft.com