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List of Figures | |
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Option History, Definitions, and Terms | |
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Underlying Instruments | |
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Option Terms | |
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The Cost of an Option | |
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The History of Listed Options | |
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The Over-the-Counter Market | |
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The CBOE Beginning | |
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Index Options | |
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Exchange-Traded Funds | |
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Futures Options | |
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Today's Over-the-Counter Market | |
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Option Trading Procedures | |
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Electronic Trading | |
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Exercise and Assignment | |
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Mechanics of Exercise and Assignment | |
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Futures and Futures Options | |
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First Notice Day | |
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Single Stock Futures | |
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Volatility Indices and Futures | |
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Futures Options Terms | |
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Influences on an Option's Price | |
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Volatility | |
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How the Factors Affect the Option Price | |
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Delta | |
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What Affects Delta? | |
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Technical Analysis | |
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An Overview of Option Strategies | |
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Profit Graphs | |
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Outright Option Buying | |
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Using Long Options to Protect Stock | |
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Buying Puts as an Insurance Policy for Long Stock | |
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Buying Calls to Protect Short Stock | |
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Buying Both a Put and a Call | |
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Selling Options | |
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Covered Call Writing | |
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Naked Option Writing | |
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Naked Put Writing | |
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Naked Call Writing | |
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Straddle and Combination Selling | |
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Spreads | |
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Vertical Spreads | |
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Calendar Spreads | |
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Diagonal Spreads | |
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When Spreads Are Attractive | |
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Ratio Strategies | |
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Ratio Writing | |
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Ratio Spreads | |
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More Complex Constructions | |
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Using an Option Model | |
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Summary | |
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The Versatile Option | |
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Options as a Direct Substitute for the Underlying | |
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Equivalent Short Stock | |
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Single Stock Futures | |
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Defending against a Limit Move in Futures Contracts | |
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Options as a Proxy for the Underlying | |
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Option Buying as a Short-Term Stock Substitute | |
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Option Buying as a Long-Term Stock Substitute | |
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Using LEAPS Puts instead of Calls | |
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The Effect of Stock Index Futures on the Stock Market | |
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Index Arbitrage | |
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Portfolio Insurance | |
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Program Trading | |
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The Effect of Index Futures and Index Option Expiration on the Stock Market | |
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Games People Play | |
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Open Interest Implications | |
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A Hedged Strategy | |
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Speculation Early in Expiration Week | |
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Trading with the Arbs | |
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The Postexpiration Effect of Futures on the Stock Market: A Trading System | |
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Expiration's Effect on Individual Stocks | |
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Options as an Insurance Policy | |
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The Collar | |
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Using LEAPS as Collars | |
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Hedging with Over-the-Counter Options | |
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Using Volatility Futures as Portfolio Insurance | |
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The Contract Details | |
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Strategies for Protecting a Portfolio of Stocks with VX Futures | |
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What Can Go Wrong? | |
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Options on VX Futures | |
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Summary | |
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The Predictive Power of Options | |
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Using Stock Option Volume as an Indicator | |
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How Much Is Too Much? | |
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The Analysis | |
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Analysis in Real Time | |
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Examples | |
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Profitability | |
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Further Considerations | |
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Using Stops | |
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When Option Volume Is Not a Good Predictor | |
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Using Option Prices as an Indicator | |
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Expensive Stock Options May Predict Corporate News | |
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Analyzing Implied Volatility for Speculative Trades | |
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Implied Volatility Can Predict Trading Gaps | |
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Some Strategies for Trading the Volatility Gap | |
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Implied Volatility Can Predict a Change of Trend | |
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Covered Call Writing When Volatility Increases | |
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Implied Volatility of Index Options | |
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A Case Study: The 1994 and 1995 Markets | |
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Another Case Study: 1997-1999 | |
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The Seasonality of Volatility | |
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Trading Volatility Directly | |
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Further Observations on Index Volatility | |
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The Put-Call Ratio | |
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The Data | |
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Interpreting the Ratios | |
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Sector Index Options Put-Call Ratios | |
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Using Put-Call Ratios to Trade Individual Stocks | |
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Futures Options Put-Call Ratios | |
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Futures Options Volume | |
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Put-Call Ratio Trading Summary | |
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On Moving Averages | |
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Summary | |
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Trading Systems and Strategies | |
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Incorporating Futures Fair Value into Your Trading | |
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Day-Trading Vehicles | |
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The TICKI Day-Trading System | |
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The Intraday Market-Reversal Corollary | |
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A Short-Term Trading System | |
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Monitoring the Oscillator Intraday | |
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Problems with the Advance-Decline Line | |
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Intermarket Spreads | |
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European Options | |
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The HUG/HOG Spread | |
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The January Effect | |
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Gold Stocks versus the Price of Gold | |
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Oil Stocks versus the Price of Oil | |
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Utility Stocks and 30-Year T-Bonds | |
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Similar-Sector Index versus Futures Intermarket Spreads | |
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Pairs Trading | |
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Other Seasonal Tendencies | |
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August: The Dull Month--Or Is It? | |
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September-October: A Very Tradeable Time Period for the Stock Market | |
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Late-October Buy Point | |
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Late-January Buy Point | |
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Summary | |
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Trading Volatility and Other Theoretical Approaches | |
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Volatility | |
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Delta Neutral Trading | |
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Keeping a Position Neutral | |
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Other Forms of Neutrality | |
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Predicting Volatility | |
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Comparing Historical and Implied Volatility | |
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Trading Implied Volatility | |
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Selling Volatility | |
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Buying Volatility | |
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The "Greeks" | |
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The Model | |
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Delta | |
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Vega | |
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Theta | |
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Rho | |
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Gamma, Revisited | |
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Gamma and Delta Neutral | |
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Even More Advanced Constructions | |
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Summary | |
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Trading the Volatility Skew | |
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Price Distributions | |
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Trading the Positive Skew | |
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Trading the Negative Skew | |
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Put Ratio Spread | |
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A Volatility Skew Biases a Position | |
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Finding Where Volatility Skewing Exists | |
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The Aggressive Calendar Spread | |
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Using Probability and Statistics in Volatility Trading | |
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Expected Return | |
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Summary | |
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Other Important Considerations | |
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Support Activities | |
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Order Entry | |
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Brokers and Brokerage | |
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Data Vendors | |
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Software | |
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Trading Methodology and Philosophy | |
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Managing Your Money | |
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Speculative Trading Procedures | |
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Actual Trading Examples | |
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Option Trading Philosophy | |
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The Biggest Mistake | |
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Summary | |
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Listed Index and Sector Options | |
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Futures Options Terms and Expirations | |
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Option Models | |
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Index | |