Options Installment Strategies

An "installment strategy" in its most basic form, combines two options, one long-term position and one short-term. This strategy is designed as a conservative, no-cost method to either eliminate risk for future trading when stock is owned; or to fix the price for a future purchase of the underlying security.

Portfolio managers and experienced individual traders face a chronic problem - risk versus time. This goes beyond the well-known time decay of options and expands to the ever-present market risk to an underlying security. How do you execute a successful, conservative strategy and eliminate or reduce market risk?

In this book, a range of effective and creative strategies set out a conservative hedging system. This involves the combination of long-term long positions offset by short-term short positions in various configurations. Options Installment Strategies presents variations on the well-known calendar spread and demonstrates how specific strategieswork well in short-term swings and even during extended periods of consolidation.

1. Chart-Based Trade Timing. - 2. Proximity and Risk. - 3.

Picking the Right Stock. - 4.

Timing with Well-Selected Technical Signals. - 5. Long-Term Market Risk Elimination. - 6.

Long-Term Contingent Purchase. - 7.

Short Options and Levels of Risk. - 8.

Alternative Offsets Beyond Short Calls or Short Puts. - 9. Combining the Short Offset Alternatives. - 10. Expanding the Strategies. - 11. Managing Potential Losses. - 12. Recovery Strategies. - 13.

The Flexibility of Options Hedging.