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"Despite all the problems and oft-quoted risks in executing option transactions, I believe that there are enough benefits available to make option strategy a helpful tool for most investors."—from the Preface

Originally published almost a decade ago, LeRoy Gross's authoritative, yet highly accessible book has been the only resource available for conservative investors looking to further their investment goals with options. Now, with a new Introduction by the bestselling author Larry McMillan, The Conservative Investor's Guide to Trading Options has been updated to help market practitioners of the present garner the same rewards reaped by investors of the past.

Using the clear, balanced approach he used with his clients during a long career in the securities industry, Gross explores the various options strategies most frequently employed with individual stocks, examines the risk factors associated with each, and offers a unique perspective on how to use options as a hedging tool. From buy stock/write call to sell stock/buy call, the strategies covered are designed to help investors be better able to increase stock income, reduce stock risk, and seek stock profits. In addition to recommended systems, Gross also points out those that conservative investors should avoid, including naked call writing, calendar spread, and call option butterfly spread.

With clear, easy-to-understand explanations, here's where you'll find complete details on:

• Reading and understanding option tables
• Entering option orders
• Negotiating commission discounts
• Understanding the language of options trading with a complete glossary

Filled with practical examples and no-nonsense information, this is essential reading for all those who want to expand their portfolios using conservative option strategies.

A classic guide to safe and profitable options strategies for conservative investors—now updated

"Derivatives have become an important tool for an ever-increasing number of investors. The broad definition of 'derivatives' includes options, futures, and many more exotic instruments that are conjured up by the leading investment banks. For most stock-oriented investors, though, the term predominantly refers to stock options. The virtual explosion in trading of stock options attests to their importance. Still, there are many who do not yet understand what stock options are or how they can be of benefit to an investor. This book is for those investors."—from the Foreword by Larry McMillan

User Reviews about The Conservative Investor's Guide to Trading Options (A Marketplace Book)

Assumes you know nothing and does an exemplary job explaining the fundamentals and foundational strategies you'll want to know trading options, like strike price selection, covered calls, puts as insurance, straddle writing, and much more. This book is truly well written in how it teaches first through theory and then through fully explained examples, breaking down calculations in clear steps. The best thing about his book is that it offers the reasoning behind different choices available to you. Once you grasp that, you have the foundational understanding to cater the theories to come up with your own personalized versions of the strategies. Only four stars for some typos that may confuse you if you're not reading carefully, like an example to buy puts instead of to sell puts and another table with some errors in sale proceeds and pretax pre-commission profits -- sloppy editing (mistakes are easily noticeable if you follow along with the calculations). My first exposure to options was through reading Saliba's Options Workbook, which is put to shame by Gross' book in terms of explaining the basics. I recommend Gross' book as a starting point for anyone interested in options. From there, move on to Fontanills' Options Course. -- Praiseworthy work - Simplifies options so anyone can understand

This is one of the better texts on conservative options strategies. It's the only book I've read that discusses the time and record keeping requirements needed to implement options strategies. This is particularly relevent to those interested in covered call writing.

Some specific recommendations in the text have been made obsolete since the emergence of online ($8 commission) trading. This has greatly increased the profit potential of shorter term positions in covered call writing. In past times, longer holding periods, and rolling of options was needed to overcome the effects of high commission prices. Now, shorter holding periods, even on in the money positions, usually yields higher profitability; contrary to the advice in the book.

This is still a very good text, and well worth reading. -- Good Book That Covers Things Other Text Don't Mention

This book does a good job of identifying the less risky types of option trades an individual investor would want to do. It goes through the various strategies with mathematical examples in a common sense approach. It does not, however, go into the theory of options which I think is necessary to use them effectively and to assure their pricing is reasonable. Larry McMillan on Options is an excellent in-depth book on option theory. -- Practical and Conservative Option Trading

Before reading this, or any, options book, one should go to [website] and study the subject thoroughly. Once you know the basics, this book can be appreciated. Note: unless one has at least about $5000, someone should quite probably stick to buying calls or puts (which the author, the late Mr. Gross rightfully labels as an 'aggressive' strategy), depending on the market's and a stock's overall outlook.
This book is at its best when used by someone with more than $5000 (and preferably more like $10,000) who can use the time-tested hedging strategies effectively detailed here. Investors on a tighter budget would likely do better with Charles Caes'"Tools of the Bull" or "Tools of the Bear" (the "Bear" book can be easily adapted to using in a bull market also). Options investors should also know some technical analysis, John Murphy's "Charting Made Easy" is a good, cost-effective source.
The layout of this book is clean and makes it easy to read. Gross was a good writer, relaying his ideas clearly to the reader. Any options book will confuse a beginner, learn them first at [website]. -- Well-Written, Crisply Edited

Most trading books give you well chosen examples of how great their methods work. Rarely the risk and downside. This one shows you the strategies, and the risks if it all goes wrong, as well as the potential profits. It walks you through clear examples and describes over a dozen strategies in a simple manner. Some I surprisingly wasn't familiar with. For example, this is one of the few option texts that mentions and walks though calendar spreads.

If you can't understand this book, you shouldn't be trading options. It is one of only 4 option texts I have kept in my library. The only criticism I have is that this book was written before discount brokers, the commissions weren't updated in the examples. You should not be without this one. Larry McMillan wouldn't be involved if it wasn't first class.

Another good one is Trester's "The Complete Option Player". -- This is a great one