(From The Jacket) – 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.