Contents

Preface .......................................................... xv

Part I
BASIC PROPERTIES OF STOCK OPTIONS
Chapter 1
Definitions ................................................. 3
Elementary Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Factors Influencing the Price of an Option .... ........................... 9
Exercise and Assignment: The Mechanics ............................... 15
The Option Markets . ............................................... 22
Option Symbology . ................................................ 23
Details of Option Trading ........................................... 27
Order Entry . ..................................................... 32
Profits and Profit Graphs ........................................... 34

Part II
CALL OPTION STRATEGIES
Chapter2
Covered Call Writing . ....................................... 39
The Importance of Covered Call Writing ............................... 39
Covered Writing Philosophy ......................................... 42
The Total Return Concept of Covered Writing ........................... 45
Computing Return- on Investment ..................................... 47

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