In 2006 over 400 million equity option contracts were traded but it is a volatile market, prices are ever changing with supply and demand the only certainty is that they will change. With little knowledge or experience, an uninformed decision can quickly drain capital. This book explains equity options from absolute basics, assuming no prior knowledge of the subject. It shows traders starting out and already using the exchanges how to enhance their equity portfolio by using the whole range of investment opportunities and tool available. This will help investors to reduce their costs, enhance returns and manage price risk with certainty and precision.
Book Details:
- Author: W. A. Beagles
- ISBN: 9780470697177
- Year Published: 2008
- Pages: 272
- BISAC: BUS027000, BUSINESS & ECONOMICS/Finance
About the Book and Topic:
In 2006 over 400 million equity option contracts were traded but it is a volatile market, prices are ever changing with supply and demand the only certainty is that they will change. With little knowledge or experience, an uninformed decision can quickly drain capital. This book explains equity options from absolute basics, assuming no prior knowledge of the subject. It shows traders starting out and already using the exchanges how to enhance their equity portfolio by using the whole range of investment opportunities and tool available. This will help investors to reduce their costs, enhance returns and manage price risk with certainty and precision.
Equity derivatives are financial derivative products whose value is dependent on the value of an underlying share or group of shares. They fall into three broad classes: Stock options, Contract for Differences and Single equity swaps. Market participants trade equity derivatives (most commonly options) in order to transfer or transform certain risks associated with the underlying security. Options are by far the most common equity derivative, however there are many other types of equity derivatives that are actively traded. Two broad categories of players exist in the option markets: risk seekers and risk avoider’s. A risk seeker, also known as a speculator, is the type of trader that is trying to profit from a prediction in market direction. A speculator will have his or her own method of analysing the market and then use the options market to make a bet on his/her analysis. A risk avoider, also known as a hedger is in the market because s/he is trying to transfer risk to the speculator. A hedger will use the option market to create insurance for his/her physical position against an adverse market movement. Hedgers will almost always engage in option spread trading, – simultaneously buying and/or selling different options/shares together to provide an ideal risk/reward profile
AUTHOR REPUTATION: Bill Beagles is well known as a highly experienced trader and trainer a unique combination in this area. Bill is still active in the markets which brings a practical perspective to his training and the books. SUPPORT FROM NYSE EURONEXT The exchange will promote the books at their regular events and will use the book as a promotional tool for their courses, it will also be distributed at their regular workshops and will carry the LIFFE, NYSE brand. TRADING GAME Accompanying trading game run off the LIFFE website to get readers started in the markets.
About the Author
William A. Beagles, London, UK, is a founder member of K2 Ltd. K2 is a training and consultancy company specializing in derivatives trading, education and consultancy.  William joined Lloyds Bank in 1984 as an economics graduate. He traded FX spot, forwards and options for the bank before helping establish their presence on LIFFE. He has traded successfully on many of Europe’s markets, including the London Stock Exchange, the German DTB (now known as Eurex), the Dutch EOE, the French MATIF and LIFFE in London (the last three are now all part of the NYSE Euronext group). William was on LIFFE from day one of option trading in 1986 and rang the closing bell on the final day of floor trading on LIFFE in 2000. LIFFE is the global derivatives business of NYSE Euronext. LIFFE offers an unrivalled range of global futures and options products, which are made available to customers in over thirty countries worldwide on its state-of-the-art trading platform, LIFFE CONNECTÂ. Every day business in derivatives on equities and interest rates, indices and commodities with an underlying value of over £1,700 billion changes hands on LIFFE – or £23m every second - making LIFFE the world’s second largest derivatives exchange, by value of transacted business. Since 2004, average annual growth in volume stands at 20%. Â