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Options Installment Strategies

Long-Term Spreads for Profiting from Time Decay

  • Michael C. Thomsett

Table of contents

  1. Front Matter
    Pages i-xv
  2. Michael C. Thomsett
    Pages 1-14
  3. Michael C. Thomsett
    Pages 15-29
  4. Michael C. Thomsett
    Pages 31-47
  5. Michael C. Thomsett
    Pages 49-65
  6. Michael C. Thomsett
    Pages 67-79
  7. Michael C. Thomsett
    Pages 81-92
  8. Michael C. Thomsett
    Pages 93-105
  9. Michael C. Thomsett
    Pages 107-121
  10. Michael C. Thomsett
    Pages 123-137
  11. Michael C. Thomsett
    Pages 139-154
  12. Michael C. Thomsett
    Pages 155-165
  13. Michael C. Thomsett
    Pages 167-173
  14. Michael C. Thomsett
    Pages 175-181
  15. Back Matter
    Pages 183-192

About this book

Introduction

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 strategies work well in short-term swings and even during extended periods of consolidation.

Keywords

Options Hedging Diagonal Spreads Options trading Trading Time Decay Short Calls or Short Puts Market Risk portfolio management calendar spread

Authors and affiliations

  • Michael C. Thomsett
    • 1
  1. 1.Spring Hill, TNUSA

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-319-99864-0
  • Copyright Information The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2018
  • Publisher Name Palgrave Macmillan, Cham
  • eBook Packages Economics and Finance
  • Print ISBN 978-3-319-99863-3
  • Online ISBN 978-3-319-99864-0
  • Buy this book on publisher's site