A book recommendation

S

shMark

I know the people here are very advanced, so this will not apply to many of you, but
I wanted to recommend a book I bought about stock options. It is called Options Trading Simplified For Beginners: Master The Essential Options Skills For Generational Wealth Even With A Small Account. The author in my view is a genius in that he can explain complicated topics in a way anyone can understand. I have read other books on options, including MacMillan’s book, and I got so confused. I understood everything I read in this book, and he covered a lot. Moneyness, calculating breakeven, the greeks, rolling, closing out positions, how to calculate how much your underlying will move. At the end he teaches you the four vertical spreads, The iron condor, the iron butterfly, the covered strangle, and the straddle. Amazingly, they were all easy to understand. What is amazing is that I did not see a single non five star review on Amazon.

 
I haven't read the said book, but I hope the author recommends the beginners to use a Cash Account, not a Margin Account.
B/c with a CashAcct all the complicated Margin stuff disappears, also no Pattern-Day-Trading (PDT) rule (meaning one is not limited in the number of trades one may make, as is the case with the PDT rule in MarginAcct). And of course never ever the danger of getting any MarginCall in a CashAcct.

See also:
Quanto said:
The challenge is to do it in a CashAcct... :)
Only these are possible: LongStock, LongCall, LongPut, CoveredCall (= LongStock + ShortCall), CashSecuredPut (= ShortPut + Cash), and combinations of them like LongStraddle, LongStrangle, Collar etc....

Ie. for ShortSelling in a CashAcct one has to use CoveredCall or CashSecuredPut.
Of course can use also both at the same time.
More...

Stock ShortSelling in CashAcct is not possible, but that's anyway not intended for beginners.
As said above, options ShortSelling is possible by using CoveredCall and/or CashSecuredPut.
Ie. Naked ShortSelling is not possible in CashAcct, but that's the most dangerous trade, and not intended for beginners at all.

For calculating the CashRequirement (also called Buying Power requirement) for CoveredCall and CashSecuredPut one can see the formulas at https://www.tradestation.com/pricing/options-margin-requirements/ under the last column labeled "Cash Accounts", or see at your own broker's web site.
 
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Quanto said:
I haven't read the said book, but I hope the author recommends the beginners to use a Cash Account, not a Margin Account.
B/c with a CashAcct all the complicated Margin stuff disappears, also no Pattern-Day-Trading (PDT) rule (meaning one is not limited in the number of trades one may make, as is the case with the PDT rule in MarginAcct). And of course never ever the danger of getting any MarginCall in a CashAcct.

See also:


Stock ShortSelling in CashAcct is not possible, but that's anyway not intended for beginners.
As said above, options ShortSelling is possible by using CoveredCall and/or CashSecuredPut.
Ie. Naked ShortSelling is not possible in CashAcct, but that's the most dangerous trade, and not intended for beginners at all.

For calculating the CashRequirement (also called Buying Power requirement) for CoveredCall and CashSecuredPut one can see the formulas at https://www.tradestation.com/pricing/options-margin-requirements/ under the last column labeled "Cash Accounts", or see at your own broker's web site.
More...
But see also these important informations to avoid violating any rules:
"Avoiding cash account trading violations" ( https://www.fidelity.com/learning-center/trading-investing/trading/avoiding-cash-trading-violations ).
 
Money Trust said:
"Generational wealth....."
The latest buzzword in guru land, which makes me skeptical.
More...

I agree that you are not going to achieve generational wealth by reading his book. However, I have read a number of books on options, and this one by a country mile teaches you the most with the least amount of work required.
 
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