36 lines
2.1 KiB
Plaintext
36 lines
2.1 KiB
Plaintext
Introduction • xv
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will soon be paupers. Making good decisions is a vital part of being an
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intelligent option investor; frenetic, haphazard, and unconsidered trading
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is most certainly not.
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Unlike books about securities analysis, you will not find detailed dis-
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cussions about every line item on a financial statement. Understanding
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how a company creates value for its owners and how to measure that value
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is an important step in being an intelligent option investor; being able to
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rattle off information about arcane accounting conventions is not.
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To paraphrase Warren Buffett,
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4 this book aims to provide you with
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a sound intellectual framework for assessing the value of a company and
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making rational, fact-based decisions about how to invest in them with the
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help of the options market.
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The book is split into three parts:
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• part I provides an explanation of what options are, how they are
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priced, and what they can tell you about what the market thinks the
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future price of a stock will be. This part corresponds to the second
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step of intelligent option investing listed earlier.
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• part II sets forth a model for determining the value of a company
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based on only a handful of drivers. It also discusses some of the
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behavioral and structural pitfalls that can and do affect investors’
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emotions and how to avoid them to become a better, more rational
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investor. This part corresponds to the first step of intelligent option
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investing listed earlier.
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• part III turns theory into practice—showing how to read the nec-
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essary information on an option pricing screen; teaching how
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to measure and manage leverage in a portfolio containing cash,
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stocks, and options; and going into detail about the handful of op-
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tion strategies that an intelligent option investor needs to know to
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generate income, boost growth, and protect gains in an equity port-
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folio. This part corresponds to the final step of intelligent option
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investing listed earlier.
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no part of this book assumes any prior knowledge about options or
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stock valuation. That said, it is not some sort of “Options for Beginners” or
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“My First Book of valuation” treatment either. |