Well, I saw a repeat of the Friday evening CNBC Options show early this morning while trying to set my DVR for something else.  It's fast paced and fairly well done, but the show is definitely better suited to option buyers and sellers of intermediate to advanced level option experience than to beginners. 

I still think the show needs a 5 or 10 minute segment each broadcast for novices  and beginners who would like to learn about options via TV.  Until that happens, assuming the show finds traction, I'd be happy to answer questions on options as best I can. 

I also think they need to get Jon Najaarian, aka Dr. J., a dynamic guru options trader and ex-NFL Bears linebacker, on the show.  This is unlikely since Jon makes appearances and offers market commentary on national radio, along with CNN, CNBC, CBS Marketwatch, CNNfn, Fox TV, WCIU, Bloomberg and Dow Jones News Services.Business News, as well as run his own trading business.  He's definitely worth listening to at every opportunity.

In a month or two, I'd like to do an options workshop here at StockCentral, assuming I get permission, on the use of covered calls and puts and how they make sense for a growth oriented investors like us.  This will basically be similar to the version I did at last August's InvestEd 2008.  Hopefully, assuming enough interest, this workshop will get a green light.  Please let me know what you think.

Saul...

In a month or two, I'd like to do an options workshop here at StockCentral, assuming I get permission, on the use of covered calls and puts and how they make sense for a growth oriented investors like us.  This will basically be similar to the version I did at last August's InvestEd 2008.  Hopefully, assuming enough interest, this workshop will get a green light.  Please let me know what you think.

Saul,

I had to miss EnvestEd 2008, much to my disappointment as I was looking forward to your options and technical analysis classes.  I would very much like to see you lead an options workshop here, especially if you begin at the very beginning.

I notice you mentions Mary Ann Davis' options class scheduled for InvestEd 2009 (and I do hope to be there).  Will you not be there as well?  I was hoping to catch up on topics I missed last year.

Saul - what a great idea!

I'll add my name to the list of those who'd like to see you teach the class.  And you plan to cover a resource (selling covered calls) which can even be executed within a 401K or IRA plan.

Thanks!

Michael,

Thanks for your note. Options, especially covered calls, can be very rewarding even for a conservative investor. In fact, that's my main option mantra. 

Options have several uses that can be of value to a growth investor. Unfortunately, too many investors avoid options, for whatever reasons, and they are missing out on an investment tool that could otherwise be advantageously employed. This subject will be covered in the upcoming workshop in addition to a bunch of other option related topics, from option nuts and bolts to basic option strategies.

You are correct, of course, in noting that covered calls can be utilized within 401K and IRA accounts. The real issue is whether or not the custodian/broker of your 401K or IRA plan will permit you to use covered calls. I have found that many custodians of formal corporate 401K plans and some brokerage firms are very resistant to the use of covered calls.

As with stocks, not all brokers do a good job in providing option servcies and resources. So, the upcoming workshop will cover brokers who specialize in options or those who do a fairly good job, in my opinion and experience, in just providing an acceptible level of option services for their stock trading customers since that's where most option activity will take place for readers in this Community.

Get your option questions ready and I'll answer those as best I can without disrupting the workshop's flow.  In other words, I may be able to respond right away to some questions or choose to delay an answer to others untill any required background material can be explained.

Here's some options history and an options question to keep you all involved until the workshop gets started.  Formal trading on an options only exchange began in April 1968.  There were 911 option contracts traded that day on the new Chicago Board of Options Exchange or CBOE. 

Just a few years later, in the mid-70's, trading soared to more than 200,000 options contacts per day.  The number of option contracts traded today on the CBOE and other exchanges is many, many times that of themid-70's level.  Clearly, options trading has arrived and then some.  The growing liquidity of the options market attracted speculators, hedgers and even conservative investors.  We'll mainly be addressing how a conservative investor should use options, but speculators and hedgers are also invited to participate.

And here's our options question of the week:  How were stock options traded before the CBOE opened for business back in April 1968? Google based cheating/research allowed 3 days after this note is posted.

Saul...

Saul - thank you for the reply.

I've traded naked put/calls for over 20 years, using technical analysis and artificial intelligence... and I'm still learning . If you're curious, there is an interview over at http://www.neuroshell.com/traders.asp?task=interviews&id=1 about the process.

I have not explored writing options; either naked or covered. I'll be very interested in the class!

Saul,

I taught a course for an NAIC club in 2007, and we covered the material at a rapid pace. Since we finished early, I asked them what they'd like to cover for the last class. Some of them had an interest in technical analysis and my options trading system, so the last class tried to provide a brief overview of both ... Technical analysis and the artificial intelligence application towards investing.

Shoot me an email address, and I'll send you the Powerpoint file as a ZIP.  The artificial intelligence section begins at slide 22, but you might find the overview of technical analysis interesting too.

Saul -

I have the date of your options course online - Feb. 16th (Monday).  Do you have the time and the webinar location? The event does not show up on the StockCentral Events calendar, and I haven't seen any formal notice on the course yet.

Attached is the updated list of options books. 

Saul...

Good morning and happy Presidents' Day.  Here's the first installment of the options workshop.

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Introduction (1)

Welcome to this options workshop.  I would like to thank StockCentral for offering us all this pleasant and helpful venue.

I expect the workshop to run for several weeks.  I will be posting the options materials on Mondays, Wednesdays and Fridays.  I will be responding to questions as soon as possible, as permitted by my schedule and work obligations so please be patient with respect to my feedback. 

Your questions are welcome and can be posted at any time.  Please direct your questions to this workshop and not to me privately.  It’s time consuming and sometimes duplicative to respond to both public and private questions.  Besides, you can count on the fact that there will be others who have the same question as you and a private answer from me will deprive them of a response to their question.   So don’t worry about your lack of option knowledge and please err on the side of sharing your question right here with your fellow attendees.

I’ll also reserve the right to answer some questions at a subsequent point in the workshop, rather then when they are initially posted.  I’m referring to questions on subject matter that is scheduled to be addressed at a later point in the workshop.  Answering such questions sooner would likely distract from discussion of our current topic, hence my desire to delay this specific type of question.  Otherwise, I’ll post answers to all other questions as soon as I reasonably can.

Further, this workshop will be limited to basic explanations of and discussions about vanilla options and strategies.  I will not cover any exotic option combinations, such as straddles, strangles or spreads, although our dialog could briefly drift into these areas.  I will touch on one kind of spread, the credit spread, later in the workshop. 

For starters, you should know that there are only two types of options available to us as investors; namely, calls and puts.  However, there are many ways in which to combine and trade these options.  As noted above, I’ll concentrate on basic option strategies and leave the exotically named butterflies and condors for another day.

This workshop is not about incentive options, the kind that are granted to executives, directors and employees of a company to boost performance and compensation.  These are a different kind of option than those traded on public exchanges although conventional options can be used to protect the value of incentive based options where permitted.  Unfortunately, it’s not unusual for companies to bar trading in publicly traded options for the company as a hedge against incentive options held by the grantee of company incentive options.

Since the nature of an underlying stock or ETF is critical to consideration of any option bought or sold on the underlying asset, it will be necessary to form an opinion on the quality of the underlying.  That means we won’t be leaving our stock studies far behind.  Please note that I will also be mixing in a modest amount of technical analysis that will be used to compliment or supplement our fundamental analysis for purposes of implementing certain option strategies.

Next, more introduction to options.

Saul...