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Enhanced Indexing Strategies by Tristan Yates

This week's featured book on options trading:

Enhanced Indexing Strategies: Utilizing Futures and Options to Achieve Higher Performance
by Tristan Yates
Wiley (November 2008)

From the publisher: Index funds are among the highest performing and most reliable investments available in the marketplace. Over the past several years, literally hundreds of index-related products have been introduced to the marketplace, most designed to provide investors with the capability to mix and match different funds in order to build custom portfolios. At the same time, leveraged investment products for the retail investor—which use borrowed capital to increase the returns within the structure of a passive investment strategy—are also one of the fastest growing products in the financial world. In Enhanced Indexing Strategies, Tristan Yates shows how to successfully combine these products using leveraged indexing to deliver better risk-adjusted returns than conventional approaches.

The idea behind leveraged investing is simple: if long-term investment returns are predictable, then even higher returns can be generated by borrowing and investing the capital over the long term in an index. Using derivatives such as futures and options, Yates reveals it is possible to not only borrow money to invest at a low rate, but also to implement hedging strategies that help reduce the risk of catastrophic losses.

Unlike other books on options trading that tell how to profit from short-term market movements, Enhanced Indexing Strategies uses options positions to capture long-term pricing trends. Using long calls and call spreads, hedging strategies, and LEAP call options—which have been hailed as an industry innovation due to their ability to maintain leverage while managing risk—Yates shows how to implement specific long-term strategies that can capture appreciation in volatile conditions across many years.

In addition to providing six different innovative long-term indexing strategies using futures and options, Yates also offers important advice on managing a leveraged investing portfolio. He covers each critical aspect of portfolio management: selecting indexes and strategies and determining the level of exposure, calculating the expected returns and the possible range of returns, and monitoring the portfolio to ensure that it is performing in accordance to projections. Yates's final piece of advice to investors is simple: get started. Every day you're not invested in an index is a missed opportunity for profits.

Also available: Enhanced Indexing Strategies (Kindle edition). Learn more about the Amazon Kindle, a wireless reading device.

Option Spread Strategies by Anthony J. Saliba

This week's featured book on options trading:

Option Spread Strategies: Trading Up, Down, and Sideways Markets
by Anthony J. Saliba
Bloomberg Press (January 2009)

From the publisher: Spread trading—trading complex, multi-leg structures--is the new frontier for the individual options trader. This book covers spread strategies, both of the limited-risk and unlimited-risk varieties, and how and when to use them.

All eight of the multi-leg strategies are here: the covered-write, verticals, collars and reverse-collars, straddles and strangles, butterflies, calendar spreads, ratio spreads, and backspreads. Vocabulary, exercises and quizzes are included throughout the book to reinforce lessons.

Trade Options Online by George A. Fontanills

This week's featured book on options trading:

Trade Options Online
by George A. Fontanills
Wiley (March 2009)

From the publisher: Since the first edition of Trade Options Online was published nearly eight years ago, much has changed in this fast-moving field. The ease of electronic trading combined with a variety of new products—including new indexes and ways to trade volatility—has spurred the ongoing growth of the options market and created profitable new opportunities in the process.

As advances in technology allow online options traders to become more independent, understanding the intricacies of this marketplace and making good trading decisions have become more important than ever. That's why options trading innovator George Fontanills has written a fully revised and updated second edition of his best-selling book.

Filled with in-depth insights and practical advice, this accessible guide provides you with a working knowledge of essential options strategies and the computer savvy to enhance your online trading endeavors. While the first few chapters outline the basics of online options trading, this book quickly moves on to address how you can integrate proven options-based trading techniques into a comprehensive plan that fits your personal preferences.

Fontanills details various managed-risk option strategies—from vertical spreads to ratio backspreads—that are designed to take advantage of everyday market opportunities, and walks you through a series of hypothetical trades that demonstrate how to compute the maximum risk, maximum profit, breakevens, and exit alternatives for each strategy. Along the way, Fontanills also takes the time to discuss other essential elements of this discipline, including trading futures options, streamlining your trading approach, and mastering the inner workings of the order process, to name a few.

In addition to this information, several appendices offer guidance that will help you maintain a competitive online edge, including a short list of options trading software; reviews of more than 200 financial resource sites broken down by specific categories; surveys of online brokerages as they compare to one another in services, commissions, and resources; and much more.

While it's rewarding to build wealth from the comfort of your computer, it takes time to learn how financial markets function as well as develop effective trading strategies to operate within them. The Second Edition of Trade Options Online will show you how to do this, and much more, whether you're looking to boost returns by using leverage or protect your investments by hedging.

Also available: Trade Options Online (Kindle edition). Learn more about the Amazon Kindle, a wireless reading device.

Trading Options at Expiration by Jeff Augen

This week's featured book on options trading:

Trading Options at Expiration: Strategies and Models for Winning the Endgame
by Jeff Augen
FT Press (March 2009)

From the publisher: Equity and index options expire on the third Friday of each month. As that moment approaches, unusual market forces create option price distortions, rarely understood by most investors. These distortions give rise to outstanding trading opportunities with enormous profit potential. In Trading Options at Expiration, leading options trader Jeff Augen explores this extraordinary opportunity with never-before published statistical models, minute-by-minute pricing analysis, and optimized trading strategies that regularly deliver returns of 40% to 300% per trade.

You’ll learn how to structure positions that profit from end-of-contract price distortions with remarkably low risk. These strategies don’t rely on your ability to pick stocks or predict market direction and they only require one or two days of market exposure per month.

If you’re looking for an innovative new way to reignite your returns no matter where the markets move, you’ve found it in Trading Options at Expiration.

Also available: Trading Options at Expiration (Kindle edition). Learn more about the Amazon Kindle, a wireless reading device.