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Rocco Pendola
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Rocco Pendola is an editor at Seeking Alpha.
My blog:
roccopendolas.blogsp...
My book:
Basic Options Trading Strategies for Beginners
  • Basic Options Trading E-Book  57 comments
    Dec 17, 2011 2:00 PM
    Much of the writing I do at Seeking Alpha involves options. Often, when I make trade suggestions, I discuss how to execute them using options. In fact, I took the $10,000 portfolio from $10,000 to over $30,000 in roughly four months almost exclusively with options. By and large, I employed basic options strategies such as long calls and puts. I have also written articles that show how to successfully execute covered call writing. 

    I focus on options because, despite the confusion some investors feel in relation to them, they can be ideal trading and investing vehicles for small investors. Not only does going long an option contract require a fraction of the capital it takes to go long 100 shares of the option's underlying stock, but proper use of options can generate considerable income for any portfolio, even conservative ones. It's a misnomer that options trading/investing equates to gambling. Most investors can use basic options strategies just as safely and effectively, if not more so, as they do with stock trades.

    Based on the number of emails and comments I receive from Seeking Alpha readers, large numbers of investors want to learn more about how to use options in their portfolios. This demand got me thinking about the best way to present basic options information to a mass audience, outside of and in addition to my Seeking Alpha articles. 

    The result of my thinking - I intend to publish an eBook about basic options investing. I call it options investing because the actionable portion of the book will focus on relatively long-term options trades. I will cover the very basics of options trading and help take beginners through the process of demystifying options and carrying out the easiest and simplest strategies. 

    I write this Instablog not only to let Seeking Alpha readers know that this is coming, but also to gauge interest for this type of information, concisely packed in one easy-to-use guide. I have not settled on what to charge for the eBook, but the cost will be nominal. 

    I would appreciate your feedback regarding your interest in the comments section of this Instablog.
    Themes: options
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Comments (57)
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  • Efsinvestment
    , contributor
    Comments (1596) | Send Message
     
    Hey Rocco, I am looking forward to see your eBook. I would also be willing to offer a hand for your success.
    17 Dec 2011, 02:10 PM Reply Like
  • flgsimoes
    , contributor
    Comments (9) | Send Message
     
    Go ahead. I am very interested.
    17 Dec 2011, 04:59 PM Reply Like
  • Todd Johnson
    , contributor
    Comments (6954) | Send Message
     
    Hi Rocco -

     

    I will buy. You name the price. Period.

     

    Todd
    18 Dec 2011, 01:18 AM Reply Like
  • Jaayd
    , contributor
    Comments (51) | Send Message
     
    Sign me up. I have been following you for a few months here.
    18 Dec 2011, 08:12 AM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Thanks to all for the comments. I really appreciate it. This and the private comments I receive help me gauge interest and consider a fair price.

     

    Just putting on finishing touches over the holiday and should publish in the 1st week of January.

     

    Please keep the thoughts and comments coming.
    18 Dec 2011, 10:22 AM Reply Like
  • Leftfield
    , contributor
    Comments (3911) | Send Message
     
    At the risk of driving the price higher by adding to the clamor mentioned in subsequent posts, this book sounds like a must-have for me.
    19 Dec 2011, 09:46 AM Reply Like
  • wyostocks
    , contributor
    Comments (9043) | Send Message
     
    Merry Christmas Rocco
    I think there is a big market for the information.
    Best of luck with it and I look forward to seeing it.
    18 Dec 2011, 11:38 AM Reply Like
  • BK0324
    , contributor
    Comments (155) | Send Message
     
    Definitely would buy an ebook on options from you.

     

    Barb
    18 Dec 2011, 12:20 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Thanks a lot for the response. It's encouraging. While I could simply be operating inside of a vacuum here, I do feel a sort of clammering (did I spell that correctly?) for some accessible material on very basic options stuff. A bit of a synchronicity, if you will.

     

    I feel like what I have to offer is of value and that I can put people in a position where they can simply take it and go from there, but not take on a whole bunch of unnecessary risk.

     

    Ultimately, others will be the judge of that.
    18 Dec 2011, 12:30 PM Reply Like
  • ducktini
    , contributor
    Comments (35) | Send Message
     
    Hello again, Rocco --

     

    The word you want there is 'clamoring'.

     

    It would distinctly be useful to see a good options primer for many of our colleagues here at SA. There appear to be many misunderstandings and misapprehensions about options on this board, and any effort to eliminate or reduce these would be very welcome indeed.

     

    Speaking as one who has written on options and option strategies for decades, if I can be of any service to you in your project, please do not hesitate to contact me.

     

    Season's best to you,
    Ducky
    18 Dec 2011, 03:45 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Yes, clamoring. As opposed to you and I making the decision to go "clamming." It was early. Sorry :-)

     

    I appreciate the input. This is really great.
    18 Dec 2011, 03:57 PM Reply Like
  • ducktini
    , contributor
    Comments (35) | Send Message
     
    Now, 'clammoring' , with 2 m's, is what you are doing when you didn't get enough clams the first time you went clamming.

     

    ;^)
    19 Dec 2011, 09:56 AM Reply Like
  • wyostocks
    , contributor
    Comments (9043) | Send Message
     
    Rocco
    "synchronicity,"
    I don't think there is such a word (just drop the ity), but I am impressed none the less.
    18 Dec 2011, 12:46 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » LOL. Sting would not agree. Simultaneous, yet meaningfully related, unrelated occurrences. Or maybe there's a "critical mass" forming of people, independent of one another, seeking beginner options information. A clammering of sorts.
    18 Dec 2011, 12:51 PM Reply Like
  • wyostocks
    , contributor
    Comments (9043) | Send Message
     
    I'll stick to Webster you stick to Sting.
    Only joshing you. Don't get serious on me.
    18 Dec 2011, 01:04 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Never. All in good fun. I was once a rabid Police fan.
    18 Dec 2011, 01:14 PM Reply Like
  • Dinny
    , contributor
    Comments (21) | Send Message
     
    looking forward to it.
    18 Dec 2011, 10:04 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Thanks so much. I am beyond encouraged by the response I have received.
    18 Dec 2011, 10:07 PM Reply Like
  • ayacsaev
    , contributor
    Comments (9) | Send Message
     
    most welcome.
    18 Dec 2011, 11:50 PM Reply Like
  • Chris Katje
    , contributor
    Comments (280) | Send Message
     
    Rocco,

     

    I am a big fan of you on this site and love the articles you put out. I am a small time investor and have never owned options. I would love to learn more in options trading and look forward to purchasing your e-book. Good luck with your writing.

     

    Chris
    18 Dec 2011, 11:53 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Thanks, Chris.

     

    Coincidentally, you'll be getting a shout-out in my next article.

     

    Great analysis of RCI.
    19 Dec 2011, 12:03 PM Reply Like
  • bhspitbull@hotmail.com
    , contributor
    Comments (206) | Send Message
     
    Sounds good Rocco! I'd also be interested, especially in simple long calls and puts, as well as how to play volatility effectively. Most books get too fancy with collars and multitudes of spreads, and lack any depth in simpler methods. Good luck!
    19 Dec 2011, 12:41 AM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Appreciated.

     

    There will be nothing advanced in the book. It will solely focus on long calls and puts and covered calls. I might end up including some mentions of selling puts, but only to make points in relation to other strategies.

     

    Otherwise, I will get as deep and as "real-life" as I can on those three early stage strategies, which, for me at least, I don't see the need to go beyond.

     

    I think what will make this unique is how I word it - very conversational and practical - and my suggestions for playing things relatively conservative. Plus, I have some opinions about options v. stocks that I do not see floated all that often.
    19 Dec 2011, 12:06 PM Reply Like
  • scottie924
    , contributor
    Comments (23) | Send Message
     
    Hey I think this would be an excellent idea! I have been following along and been doing a little bit of dipping my toes in options. But I'd like to read some more about them before I can invest any worth while about of my money.

     

    I'll buy the book the day you publish it.
    19 Dec 2011, 10:46 AM Reply Like
  • DrizzyDizzle
    , contributor
    Comment (1) | Send Message
     
    I would love to read it... can i preorder now
    19 Dec 2011, 11:36 AM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Thanks again to everybody here for the excellent feedback. I cannot express how much I appreciate it and how encouraging it is.

     

    No, unfortunately, you cannot preorder it. I will be putting the finishing touches on it over the holiday break and intend to have it up, via Amazon's program, in the first week of January 2012.

     

    Because it will not be a major text in terms of length and will focus only on the very basic options strategies, the price will be modest and more than fair.

     

    Again, thanks so much.
    19 Dec 2011, 12:02 PM Reply Like
  • BK0324
    , contributor
    Comments (155) | Send Message
     
    I can't wait! I am very confused - or rather unsure - on difference, in profit terms, between "in the money" and "out of the money", "deep in the money" etc. and how it affects the calls. I have made really stupid trades, gaining nothing, at best, losing money, at worst.

     

    Would that be something you could touch on?
    19 Dec 2011, 12:12 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Definitely. I start from the ground up. Literally. You'll need just a basic understanding of buying and selling STOCKS to be able to follow along with ease.
    19 Dec 2011, 12:14 PM Reply Like
  • nedved
    , contributor
    Comments (29) | Send Message
     
    I'd definitely buy it. Any chance of making a more advanced options trading Ebook later on?
    19 Dec 2011, 12:22 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Probably not. And here's why. I don't get much into the more advanced stuff because I don't think it's necessary or even really prudent for an investor such as myself. Because of this, I don't feel comfortable writing about advanced stuff, for two main reasons.

     

    One, basically what I stated. I don't do it and I don't plan to so it's not an area I think I can offer much on. The basic stuff- I feel like I have it covered pretty well and can offer some level of valuable insight/food for thought.

     

    Two, part of the point for writing this introductory eBook is to help people avoid what I think is a major pitfall -- going too far, too fast and getting into advanced stuff you probably should just leave alone. I don't think basic options should be a gateway drug, so to speak, you should enjoy the high of the basics and stick with it. I don't mean to make a global statement there, but I think that's the case for lots of investors, including relatively small ones such as myself.
    19 Dec 2011, 12:27 PM Reply Like
  • nedved
    , contributor
    Comments (29) | Send Message
     
    Interesting take on the advanced strategies since I've actively been using basic options strategies for the past year or so. I probably fall into the group of people you were speaking of in your second point. Looking forward to the new book.
    19 Dec 2011, 03:13 PM Reply Like
  • matty2010
    , contributor
    Comments (3) | Send Message
     
    I just got started with options trading. I would love to get your ebook.

     

    I am waiting :-)
    20 Dec 2011, 12:04 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Sounds great. I appreciate it. Target date: 1st week of January at Amazon. I will keep you posted.
    20 Dec 2011, 12:50 PM Reply Like
  • Zimermann
    , contributor
    Comment (1) | Send Message
     
    Great ! I'll buy ! Just tell me where, how and the price!!
    20 Dec 2011, 02:59 PM Reply Like
  • clhanes
    , contributor
    Comments (50) | Send Message
     
    Sign me up!

     

    I've commented on how beneficial I find your commentary and have been trying to get my head around options trading/investing for some time with no success.

     

    Charles
    29 Dec 2011, 08:18 AM Reply Like
  • PeterF
    , contributor
    Comments (2) | Send Message
     
    Rocco, VERY interested.
    29 Dec 2011, 09:19 AM Reply Like
  • Stan Sutfin
    , contributor
    Comments (120) | Send Message
     
    Count me in but I do wish you would cover selling puts. I have sold these on AAPL and done well. Think it is an area often overlooked.
    29 Dec 2011, 09:20 AM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Thanks to everybody here for commenting.

     

    I have decided to discuss cash-secured puts. I am adding that and putting the finishing touches on everything else. I expect to submit it to Amazon next week. I assume it will be available shortly thereafter.

     

    Again, this is going to be very basic level stuff. I think that's where a major need exists, but, more so, I think it's one I can legitimately address.
    29 Dec 2011, 09:50 AM Reply Like
  • BK0324
    , contributor
    Comments (155) | Send Message
     
    How's that book coming, Rocco ... ;)

     

    I sold my first put yesterday, just couldn't wait. It's a stock I feel very comfortable owning, namely SI. I have quite a few in different account right now, and sold covered calls on all of them. They go ex divi on 1/20 - it's a yearly dividend of 4.04 ( close to that) and so I decided to sell a contract of Feb 12 - $85 - my thinking is that they will probably not go that low, and I made a little bit of money. But even if they do, I will be happy to own them, as this company isn't going anywhere, and I am confident that sometime soon the whole Euro thing will be resolved.

     

    I had an interesting thing happen involving selling covered calls for LYB recently, and they announced a special dividend, which caused the strike price to be lowered by the amount of divi = $4.50 per share! I was livid, but learned from it, to always check the literature when a special dividend is announced.

     

    ok, I'm rambling, just wanted to add - HAPPY NEW YEAR!!
    29 Dec 2011, 09:28 AM Reply Like
  • Jaayd
    , contributor
    Comments (51) | Send Message
     
    When's the next portfolio beginning?
    30 Dec 2011, 08:44 AM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » It's on: http://seekingalpha.co...

     

    Thanks for asking.
    30 Dec 2011, 09:31 AM Reply Like
  • Rufus D
    , contributor
    Comments (357) | Send Message
     
    Hi Rocco, are you going to publish on amazon ebooks? I want to buy it and read it on my Kindle Fire. Also let us know about your experience of self publishing up there if you decide to do it. I published a book my mom wrote on lulu, but I am thinking about amazon self publishing for my next one.
    30 Dec 2011, 08:05 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Hi Rufus- Yes, going through Amazon. You will be able to read it on Kindle Fire, as I will mine. Such a nice little device. I have heard good things about Amazon's program. We shall see.
    30 Dec 2011, 08:07 PM Reply Like
  • fantabella
    , contributor
    Comments (4) | Send Message
     
    Very much looking forward to your ebook and will be happy to purchase.
    31 Dec 2011, 12:28 AM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Sounds great. Thanks! Working hard on finishing touches. Hope to have it available next week.

     

    Happy new year.
    31 Dec 2011, 01:00 AM Reply Like
  • Oceanstats
    , contributor
    Comments (65) | Send Message
     
    I still haven't took the options dive yet even after talking to you months back. Just need to do it and get familiar with them. Looking forward to your ebook to help me through the learning curve.
    1 Jan 2012, 05:24 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Good stuff. I am pretty excited about it. I hope people end up satisfied and feel like it's worth it. I think the price is more than fair for the amount of information. It will be tightly packed.
    1 Jan 2012, 05:35 PM Reply Like
  • Paul Zimbardo
    , contributor
    Comments (576) | Send Message
     
    Also looking forward to it Rocco as I know our styles will align well. I have always wanted to do something like this but alas never have the time. Maybe one day.

     

    It will be humorous when you see Amazon reviews stating things like "How can you write a book on options? They are far too risky and made the financial markets collapse. Shame! You are the 1%!"

     

    Please let me know when it is published and I will help spread the word!
    2 Jan 2012, 11:51 AM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Thanks, Paul. I appreciate it.

     

    Aiming for early this week. Lots of it will be up to Amazon and their turnaround time.
    2 Jan 2012, 11:54 AM Reply Like
  • Brian Gorban
    , contributor
    Comments (1121) | Send Message
     
    This sounds fantastic Rocco and I'll be your #1 fan and spread the word/drive buyers. You do fantastic work buddy.

     

    -BG
    3 Jan 2012, 06:56 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Thanks much. I really appreciate that. Means a lot to me.
    3 Jan 2012, 07:01 PM Reply Like
  • Barneyiknow
    , contributor
    Comments (40) | Send Message
     
    Looking forward to it Rocco. I made a ton of money off of your recommendation(s) last year. You are very appreciated in my circle.
    3 Jan 2012, 10:38 PM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » Boy, I am starting to get nervous that I am able to deliver here.

     

    It's pretty dry and straightforward, very basic stuff. Densely packed with some good nuggets, I think, that I don't see discussed quite the same way elsewhere.

     

    It's submitted and in Amazon's hands now. Should be live any hour now. I will keep you posted.

     

    I am really grateful and somewhat surprised by the great response. Thank you.
    3 Jan 2012, 10:46 PM Reply Like
  • BK0324
    , contributor
    Comments (155) | Send Message
     
    Your writing is very clear and easy to understand, I for one, appreciate that. There is so much to learn about investing, you might be writing more ebooks going forward, who knows?
    4 Jan 2012, 06:29 AM Reply Like
  • Montie Carr
    , contributor
    Comments (80) | Send Message
     
    It would be very helpful Rocco. Most other option providers jump into complex options which I don't think is entirely necessary for everyone. One big thing I see missing from options tutorials is the strategy behind what option is executed.
    4 Jan 2012, 07:36 AM Reply Like
  • Rocco Pendola
    , contributor
    Comments (6132) | Send Message
     
    Author’s reply » The book is available for purchase at Amazon.com: http://amzn.to/x8gwxu

     

    If you do not have a Kindle, you can download a program at Amazon that permits viewing on your computer.

     

    I hope people are happy with the product.
    4 Jan 2012, 09:03 AM Reply Like
  • Mad Hedge Fund Trader
    , contributor
    Comments (4963) | Send Message
     
    I strongly urge readers of this letter to log on to Amazon and by a copy of Options for the Beginner and Beyond by W. Edward Olmstead. Options contracts offer investors a wonderful instrument for minimizing risk, while maximizing the upside, and I am going to recommend many more such strategies in the future. So, if you want to have the slightest idea of what I am talking about, get yourself some grounding in this important field by reading this book. You don’t have to be a math genius to figure this stuff out, and the risk reward benefits are great.
    Olmstead, a math professor at Northwestern University, starts out with a basic Options 101 course, going into the merits of puts and calls. He catalogues the exchanges where they are listed, and the vast number of products that can be traded, including stocks, bonds, commodities, currencies, and precious metals. He goes into the mundane, but important details on the administration side of things, such as settlements. For the more technically inclined, he launches into options theory pricing, and goes into the origins and utility of the Black-Scholes equation. We learn about the arcane world of what traders call “the Greeks”, the deltas, thetas, and vegas of individual positions. He then launches into basic option strategies, like call and put spreads, ratios, straddles, strangles, collars, and condors.

     

    - The Mad Hedge Fund Trader
    29 Aug 2012, 10:37 PM Reply Like
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