Options for Volatile Markets: Managing Volatility and Protecting Against Catastrophic Risk, 2nd Edition: 143 (Bloomberg Financial) - Hardcover

Lehman

Hardcover

ISBN 10: 1118022262 ISBN 13: 9781118022269

Publisher: Bloomberg Press, 2011

Synopsis

Practical option strategies for the new post-crisis financial market

Traditional buy-and-hold investing has been seriously challenged in the wake of the recent financial crisis. With economic and market uncertainty at a very high level, options are still the most effective tool available for managing volatility and downside risk, yet they remain widely underutilized by individuals and investment managers. In Options for Volatile Markets, Richard Lehman and Lawrence McMillan provide you with specific strategies to lower portfolio volatility, bulletproof your portfolio against any catastrophe, and tailor your investments to the precise level of risk you are comfortable with.

While the core strategy of this new edition remains covered call writing, the authors expand into more comprehensive option strategies that offer deeper downside protection or even allow investors to capitalize on market or individual stock volatility. In addition, they discuss new offerings like weekly expirations and options on ETFs. For investors who are looking to capitalize on global investment opportunities but are fearful of lurking "black swans", this book shows how ETFs and options can be utilized to construct portfolios that are continuously protected against unforeseen calamities.

• A complete guide to the increased control and lowered risk covered call writing offers active investors and traders
• Addresses the changing investment environment and how to use options to succeed within it
• Explains how to use options with exchange-traded funds

Understanding options is now more important than ever, and with Options for Volatile Markets as your guide, you'll quickly learn how to use them to protect your portfolio as well as improve its overall performance.

About this title

About the Author

RICHARD LEHMAN is the founder of RHL Capital, a registered investment advisor, and a part-time instructor of behavioral finance and options at UC Berkeley Extension. He is also the author of Far From Random, and publishes an investment newsletter called the Channelist. Lehman's financial career spans more than thirty years in product management, marketing, sales, and investment management beginning with an eleven-year stint on Wall Street with E.F. Hutton & Co., Thomson McKinnon Inc., and the New York Stock Exchange.

LAWRENCE G. MCMILLAN is the founder and President of McMillan Analysis Corporation. He authors the Daily Volume Alerts, a unique daily service that selects short-term stock trades by looking for unusual increases in equity option volume. McMillan manages option-oriented accounts for individual investors and also publishes the Option Strategist, a derivative products newsletter covering equity, index, and futures options. McMillan's web site, www.optionstrategist.com, twice received a "Best of the Web" award from Forbes magazine. He is the coauthor, with Richard Lehman, of the first edition of this book and the author of McMillan on Options (Wiley) and Options as a Strategic Investment.

From the Back Cover

TODAY'S FINANCIAL MARKETS harbor risk and uncertainties far beyond historically accepted norms especially when it comes to the "new normal" of equity investing, which presents new challenges in managing these risks. Nobody understands this better than authors Richard Lehman and Lawrence G. McMillan, and now, with the Second Edition of Options for Volatile Markets, they share their extensive experience in this evolving field with you.

With economic and market uncertainty at a very high level, options are still the most effective tool available for managing volatility and downside risk, yet they remain widely underutilized by individuals and investment managers. In the Second Edition of Options for Volatile Markets, you'll discover specific strategies to lower portfolio volatility, protect your portfolio against any catastrophe, and tailor your investments to the precise level of risk you are comfortable with.

Engaging and informative, this new edition remains true to the core strategy of covered call writing, but also expands into more comprehensive option strategies that offer deeper downside protection or even allow you to capitalize on market or individual stock volatility. It opens with a quick refresher on options, from how they're traded to the factors that affect their price, then moves on to reveal the most effective covered call writing techniques currently available. While basic covered call writing is thoroughly explained, you'll also gain valuable insights into more sophisticated implementations of call writing, including the use of margin, employing underlying securities other than stocks, and partial or ratio writing.

Lehman and McMillan also examine other important, but often underutilized option strategies such as put hedging and spreading discuss follow-up actions that stem from basic put hedging, and explore using combined put-call strategies as a continuous portfolio management approach for dealing with volatility and reducing downside risk. Along the way, you'll even become familiar with the rapidly growing practice of using options with exchange-traded funds (ETFs), learn how to actually trade volatility by itself through recently introduced vehicles like VIX and VXX, and employ volatility strategies to hedge an equity portfolio.

Understanding options is now more important than ever. With the Second Edition of Options for Volatile Markets as your guide, you'll quickly learn how to use them to protect your portfolio as well as improve its overall performance.

From the Inside Flap

Today's financial markets harbor risk and uncertainties far beyond historically accepted norms―especially when it comes to the "new normal" of equity investing, which presents new challenges in managing these risks. Nobody understands this better than authors Richard Lehman and Lawrence G. McMillan, and now, with the Second Edition of Options for Volatile Markets, they share their extensive experience in this evolving field with you.

With economic and market uncertainty at a very high level, options are still the most effective tool available for managing volatility and downside risk, yet they remain widely underutilized by individuals and investment managers. In the Second Edition of Options for Volatile Markets, you'll discover specific strategies to lower portfolio volatility, protect your portfolio against any catastrophe, and tailor your investments to the precise level of risk you are comfortable with.

Engaging and informative, this new edition remains trueto the core strategy of covered call writing, but also expands into more comprehensive option strategies that offer deeper downside protection or even allow you to capitalize on market or individual stock volatility.It opens with a quick refresher on options, from how they're traded to the factors that affect their price, then moves on to reveal the most effective covered call writing techniques currently available. While basic covered call writing is thoroughly explained, you'll also gain valuable insights into more sophisticated implementations of call writing, including the use of margin, employing underlying securities other than stocks, and partial or ratio writing.

Lehman and McMillan also examine other important,but often underutilized option strategies―such as puthedging and spreading―discuss follow-up actions that stem from basic put hedging, and explore usingcombined put-call strategies as a continuous portfolio management approach for dealing with volatility and reducing downside risk. Along the way, you'll even become familiar with the rapidly growing practice ofusing options with exchange-traded funds (ETFs),learn how to actually trade volatility by itself through recently introduced vehicles like VIX and VXX, andemploy volatility strategies to hedge an equity portfolio.

Understanding options is now more important than ever. With the Second Edition of Options for Volatile Markets as your guide, you'll quickly learn how to use them to protect your portfolio as well as improve its overall performance.

Edition details

• Publisher: Bloomberg Press
• Publication date: 2011
• Language: English
• ISBN 10: 1118022262
• ISBN 13: 9781118022269
• Binding: Hardcover
• Edition number: 2
• Number of pages: 224