Why Trade Options?

Mark D. Wolfinger

Jan 2012 · FT Press

About this ebook

In an era where “buy and hold” investment strategies no longer work, investors desperately need portfolio protection. Fortunately, it’s available—in the form of options. In Why Trade Options? top trader and options instructor Mark D. Wolfinger shows how options can be used conservatively, to systematically reduce risk and protect assets. Wolfinger explains the choices that options provide to cautious investors and explains the tradeoffs associated with each alternative. You’ll learn how to use “protective” (a.k.a. “married”) puts to buy complete protection at a higher price—and how to use covered calls to gain more modest protection, without paying a dime out of pocket. Wolfinger shows how to use simple “collars” to gain more protection at lower cost and helps you use options-based “stock replacement” strategies to lock in stock profits (while objectively considering the tax implications). Nowadays, intelligent investors need to address risk as much as return. Why Trade Options? gives them powerful tools for doing just that.

About the author

Mark D. Wolfinger has been trading options for more than 35 years and served as a market maker on the trading floor of the Chicago Board Options Exchange (CBOE). For more than 9 years, he has taught individual investors how to adopt risk-reducing, profit-enhancing option strategies. He is author of three books, including The Rookies Guide to Options: The Beginner's Handbook of Trading Equity Options, which shows options newcomers how seasoned traders make their trading decisions and describes six leading option strategies in detail.