The Intelligent Option Investor: Applying Value Investing to the World of Options

HOW TO USE YOUR HUMAN ADVANTAGE TO OUTPERFORM ALGORITHMS IN THE OPTIONS MARKET

If you're a value investor who wants to get your money into the lucrative options market, forget about day trading, chart patterns, and market timing. This systematic book lays out a path to long-term wealth by taking positions on companies with real intrinsic value--the kind Ben Graham and Warren Buffett would invest in.

Leave the complex algorithms and "Greeks" for the floor traders. Erik Kobayashi-Solomon, former investment banker, hedge fund risk manager, and valuation consultant to the World Bank, gives you the knowledge and sophistication to understand what options pricing reveals about the market's estimation of future stock prices. He then demonstrates how to find tremendous opportunity for low-risk, high-profit investments in the difference between the market's mechanized price ranges and ones made by you, a thoughtful human being armed with the insight this book offers.

Everything you need to make options a powerful contributor to your portfolio is inside, including:

• A thorough explanation of what options are and what their prices can tell you about the market's expectations for the future price of a stock
• A proven way to envision the risk/reward trade-off for stocks and options and a straightforward method to use the flexibility and directionality of options to tilt the risk/return balance in your favor
• A robust and intuitive framework for assessing the value of a company
• Strategies to avoid the most common behavioral pitfalls
• Tips for using the information on an option-pricing screen
• Thorough coverage of important option investment strategies, including "covered calls," "protective puts," and "collars"