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The Rookie’s Guide is now an eBook

I’ve been asked to do it many times, and I am happy to announce that the Rookie’s Guide to Options, 2nd edition is available in eBook format.

At this time, the only versions available are Kindle and pdf.

The new eBook and the paperback version were updated (minor changes) Sept 11, 2014.

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New eBook: Iron Condors

I’m very pleased to announce that I just published my new eBook, Iron Condors.

Also available at iTunes, Barnes & Noble or your favorite bookseller.

IronCondorsVOL2

This is not your ordinary “How to trade an option strategy” book. Read the full description below.

To celebrate the launch, I’m offering a special promotion to anyone on my e-mail list. If you are not already on the list, subscribe now and become eligible for the promotion.

So what’s the deal?

Buy either version of Iron Condors by Mark D Wolfinger and I’ll give you an eBook of your choice from the list below.
Offer expired 8/31/2014. Thank you to everyone who participated.

Here’s what to do

  1. Buy the eBook. No matter where you buy it, you will receive a receipt.
  2. Forward that receipt via e-mail to: books (at) mdwoptions (dot) com
  3. In the message, tell me which of the four eBooks (below) you prefer — and also the format: Kindle (.mobi) or ePub.
  4. I’ll send the eBook via e-mail

4Books

Book Description

Iron Condors is the third book in the “Best Option Strategies” series and each offers a hands-on education for some of the most useful option strategies. It is intended to be very different from all other books about iron condors.

Expect to learn the basic concepts of trading iron condors: (1) How to decide which options are suitable for your iron condor. Know in advance that there is seldom a single ‘best’ position that suits all traders; (2) Ideas — with specific examples — on how to manage risk; (3) Figuring out when to exit. We’ll discuss the pros and cons of locking in profits quickly (not a good idea) vs. holding longer (but not too long).

There is more that makes this book so special. It is not just a “how to” book because I share lessons learned from a lifetime of trading options (starting in 1977 when I became a CBOE market maker). I share my philosophy on iron condor trading and ideas on how a winning trader thinks. The goal is to offer guidance that allows you to develop good trade habits and an intelligent way of thinking about trading. We all learn as we gain experience, but some experience can be destructive when mindsets — that are dangerous to your longevity as a trader — become ingrained habits. This book helps traders avoid developing a difficult-to-break way of thinking.

This book was prepared for an audience that already understands the most basic concepts about options. Although some of the material is suitable for rookies. If you do not understand the difference between a put and call or have zero trading experience, I encourage you to begin with the most basic concepts about options before continuing. There are numerous sources of information, but I recommend my recently updated (2013) The Rookie’s Guide to Options, 2nd edition.

Another decision involves the pre-planned (I encourage preparation of a trade plan for each trade) exit when the target profit is achieved. If you have no profit target, then you will be hard pressed to exit when the trade continues to earn money. As profits accumulate, it becomes a daily decision: hold or exit. It is important to recognize when there is too little remaining profit potential for the prudent trader to hold. The trade plan helps with making good and timely decisions — and that makes you a more disciplined trader.

Closing the position could also be a gut-wrenching decision that locks in a loss and is made because it has become essential to take risk-reducing action. The book offers a solid introduction to risk management for iron condor traders.

The following points represent the foundation of my beliefs, and the book is written accordingly: (1)The ability to manage risk is the most important skill for any trader; (2) Take time to learn about the Greeks. It is not difficult, and it allows you to recognize the risk (and reward) potential for any position; (3) Discipline is necessary when managing risk. It is one thing to say that you understand what risk management is all about, but it is another to put it into practice; (4) Let another trader earn the last nickel or dime on the call and put spreads that comprise the iron condor. Pay a small sum to exit, lock in profits, and eliminate all risk.

The iron condor is most often traded as a single transaction, consisting of four legs. However, it is managed as if it were two positions. This is not a contradiction. This mindset is covered in detail.

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iBooks and Me.

A bunch of eBooks about trading options were recently published. Some are good, some not so much. It is difficult to separate the high-quality books from those serve little purpose.

My classic book for beginners from the year 2000: The Short Book on Options (2002) became available as an iBook for the first time today, and I’m proud to join the Apple community.

This book is not for the experienced trader. It is a detailed description of one strategy (writing covered calls) as well as a thorough description of how options work.

The book is also available at your favorite book seller.

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The Rookie’s Guide to Options: Intrdoduction

This is an excerpt from the Introduction to The Rookie’s Guide to Options.

You are about to enter the exciting world of stock options. These versatile investment tools possess properties not found elsewhere in the investment universe: limited lifetimes with explicit expiration dates. Options were invented as hedging, or risk-reducing tools, allowing specific risks (described by the Greeks) associated with owning any position to be identified. Thus, each risk factor can be controlled to suit your needs.

Options allow investors to use leverage to take control of far more valuable stock positions with less cash at risk.

Options are versatile and can be used in a variety of strategies, ranging from ultra conservative to outright gambles. I encourage readers to adopt strategies between the extremes.

It is possible to use advanced mathematics when discussing options, but in keeping with the goal of making this an enjoyable learning experience, this book uses nothing more complicated than elementary algebra. Let’s leave the advanced math to the academics.

Equity options are related to stocks. The term used to describe that relationship is derivative. The value of an option is derived from the value of an individual stock or group of stocks (an index). If this sounds complicated, it is not. Computers and calculators do the math for us, and our job is to understand how to use the numbers — just as we learn to use any tool.

This book delivers the background information needed to understand why options do what they do. Note that key word: ‘understand.’ I’m not going to define a term without explaining how it relates to trading options. I’m not going to tell you how to open a trade and then leave you stranded. You will learn to open, manage and exit positions. I do not provide rules to follow. Instead, you get detailed explanations and suggestions that enable you to make your own decisions.

Many trade choices are personal, and I cannot know your specific circumstances. However, I’ll help you find trades and make trade plans that suit your tolerance for risk and financial goals. In other words, we will work within your comfort zone.

The book contains a great deal of background information (Part I), lessons on three basic strategies (Part II), as well as explanations of how to adopt more advanced strategies (Part III).

These lessons are designed to help you use options effectively. That means trading with less risk, increasing the frequency of winning trades, and earning more money (when compared with trading without options). There is one important point: both the basic concepts and basic strategies are easy to understand. As with any other endeavor, the more sophisticated you become, the more you can do. Consider this book to be your college level course—perhaps even an elective course. However, it is not graduate school. Option trading can get very sophisticated and today’s top experts are quants with a PhD in math or physics. The good news is that you do not have to compete directly with them. Option trading is so widespread that there is ample opportunity for everyone.

If you want to become an expert trader, this book will not get you there. However, it is an excellent starting point. And if your objective is to enhance your income by generating earnings with less chance of suffering large losses, then you have come to the right place. You do not have to compete with the professionals. Most of us can succeed by adopting the most basic strategies —if we have the discipline to manage risk. While I appreciate advanced strategies, I use only the methods discussed in this book when trading my personal money.

This guide takes you from the novice stage through the intermediate trader stage. Although intended for option rookies, there is enough meat in The Rookie’s Guide to Options for the investor who already trades options. Re-reading these pages as you gain experience will provide insights you may have missed the first time.

My objective is for you, the reader, to gain a solid understanding of options and learn to use them to improve your investment results. You will not learn everything there is to know about options, but, you will be prepared to trade profitably. If we each do our jobs well, you will come away with a clear understanding of options—how they work and how you can make money by incorporating option strategies into your investing methods.

Be prepared for discussions on risk, including definitions (how much money can be lost vs. the probability of losing), setting risk limits (position size), using calculators to discover the odds that something specific will go wrong (stock doesn’t move your way), etc. Included are ideas on how to handle risky situations. Is it better to get out of the trade or use an ‘adjustment’ trade that reduces risk to an acceptable level (compared with the potential reward)? These are all part of risk management, and included are my thoughts on why survival should be any trader’s top priority. Earning money is important—in fact it is our reason for trading—but it ranks behind risk management, unless you plan to have a very short trading career.

Rookies

In the sports world, a rookie is someone in his/her first year of professional play. The term also refers to someone who is new to a profession. This book was written for newcomers to the world of options—not necessarily investment rookies, but option rookies. The strategies detailed are not the only ones available, but they were chosen because they can be understood and put into practice by traders who have patience and discipline. I stress discipline throughout the book because without it you have almost no chance of becoming a successful trader. Most investors who enter this realm are familiar with stock investing from the standpoint of owning individual stocks (mutual fund ownership does not count, but ETF trading does). If that is your experience, it should be a smooth transition when you add options to your arsenal of investment tools.

If you are brand new to investing, then you have more to learn. However, the good news is that you can get started without having formed any difficult-to-break bad habits.

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Why I Write

Between blog posts and books, I have written and published more than one million words.

That’s a lot of words and raises questions: Who am I to offer education and advice? Why would anyone care to read this stuff?

The short answer is that I care. Over my career as a market-maker I’ve seen customers entering orders that made little sense. It is true that when someone enters an order, we market makers never knew what position that person already owned and whether the new order was a hedge. However, customers were not very sophisticated in the 1980’s and there was no industry-wide attempt to educate them — as there is today. Thus, they made mistakes. They paid too much for options, and they adopted losing strategies. I sincerely wanted to help provide an education.

Once I left the CBOE trading floor (mid-2000), I started a small education business. Writing is a major part of that. I love writing books about options. I appreciate more than I can express in words when a reader sends an e-mail expressing gratitude or telling me how much a specific book has helped. I’ve made some friends through a correspondence that began with a simple question about options.

So I continue write articles with lessons, tips, suggestions and ideas to consider. And I’m still publishing books. To current readers, thank you for the time we spent together. To new readers of this blog: I bid you welcome and hope that you find my heartfelt efforts to be trustworthy.

At one point, I considered writing to be a solitary activity, but I received so many appreciative e-mail messages that I soon understood that a bond had been created between us. For many readers — perhaps the majority — that relationship is fleeting. For others, it is closer — perhaps as between you and a teacher/mentor/friend.

I write because I have a passion for teaching people how to get started using options to make a better financial future for themselves. It is as simple as that. I am not a trainer of professional traders. Nor can I help a rookies trader become experts. And I certainly do not want to encourage anyone to become a market speculator using options. But I do preach the importance of managing risk and never exposing yourself to a loss that is larger than you are willing to accept.

I pass along some of my thoughts: how I handle a trade from entry to exit. I don’t suggest specific traders; I have almost no rules cast in stone. I teach traders to be logical in their thoughts and to dismiss old ideas that they know just do not work. Come along and jon me. Enter into a discussion — your comments and questions will be more than welcome.

I know there are many millions of investors who will never care about, and never learn about, options. I write for those who want to take some of the risk out of investing and for those who want to increase their chances of earning enough money to provide a supplement to their ‘regular’ earnings.

I have James Altucher to thank for this writing mindset. I am sure that because of the way he writes and the very personal topics that he discusses, readers have a wide range of opinion about him. I think his sense of humor is top notch, I trust his advice. But I’m sure that others think he is a mental case. Nevertheless because he shares so much of his personal stuff, I thought that I could share a piece of mine.

IntroToOptions

New (2014) ebook

New (2014) ebook

Coming soon

Coming soon

http://goo.gl/4dNYsf

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Recent News: About.com

I have two important announcements

One

Beginning today, Feb 4, 2014, I am the option blogger for about.com.

This project is so new that I do not yet have the URL, but I believe it will be: www.options.about.com

About.com provides articles and videos concerning a multitude of topics, authored by experts. With approximately 90 million users each month, this is one of the most-visited sites around. The new channel is part of the larger money channel.

My plan is to reach out to as many people as possible, the only requirement is that they have some desire to learn about options and how to use them effectively. I’ll be offering my usual high-quality lessons and commentary and the plan includes replying to every question submitted by readers.

Pay us a visit. I’ll add the official URL when I get it.

Two

I have been giving away an e-book entitled: Introduction to Options: The Basics. That book has now been expanded and updated as a Kindle ebook. Important note: This is a basic introduction to options for people who know nothing about the topic. There are no lessons that get the reader started with trading. Instead it is designed to give readers an idea of whether they have any interest in studying my favorite investment tool, options.

Amazon requires a minimum price of 99 cents for Kindle books.

Here is a link to the older, shorter (and free) .pdf version.

This book is part of the “Best Option Strategies Series”

IntroToOptions

http://goo.gl/uzfkVd

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Writing Naked Puts

My plan for 2014 includes the preparation of several low-priced ebooks, each dedicated to a specific option strategy.

The first one is available today, and the strategy is the sale of naked put options.

WritingNakedPuts02

NOTE: As a general rule for traders, I prefer to recommend the sale of put spreads (or call spreads for bearish traders), rather than naked options. Nevertheless, the prudent sale of naked put options is a good strategy for most investors and for some experienced shorter-term traders.

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The Short Book on Options

I trust everyone had a good weekend. Here (Evanston, IL) we still have lots of snow on the ground from last week, and now we are in a deep freeze (well below 0 degrees F).

Mt first book, The Short Book on Options, is almost 12 years old, but still timely for option newbies who want to get started with the basic concepts about options and how they work. The discussion is on one strategy, writing covered calls.

As of 2014, I am now offering a Kindle version ($3.99) as well as the paperback.

Frontcover

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