The Tactical Option Investor

Roberts’ debut provides an insider’s take on utilizing options to enhance portfolio returns while minimizing risk in bullish and bearish markets.

After a brief history of Wall Street’s “boiler room operations,” “pump and dump” and Ponzi schemes, insider trading and algorithmic trickery, Roberts, an options-trading veteran of more than 15 years, offers a stern caveat concerning fraud to both experienced and potential traders. Only through education can investors protect themselves, he writes, before laying out a solid lesson plan. There are no guaranteed ways to minimize all risks, but Roberts offer solutions to keep them low. The first: Manage your own portfolio or work with a registered investment adviser—not a broker. He suggests investing in low-cost, broad-based index or sector-based funds to avoid “company-specific risk entirely,” and he explains the benefits of using exchange trade funds before delving into the minutiae of options trading, “one of the few areas where the small investor has an advantage.” Options are contracts written on an underlying investment vehicle—for Roberts’s purposes, stock and ETF options. Most importantly, they can be used to manage stock portfolios and produce solid returns while lowering risk. While there are only two types of options contracts (calls and puts), Roberts demonstrates the numerous strategies one might employ in various market conditions, from the simplest to understand—“the long call”—to the more masterful-sounding: “the iron condor” and “the long straddle.” Roberts writes in short, declaratory sentences that are simple to follow, making market jargon easy to comprehend. Quick and concise, the book makes perfect plane reading for anyone interested in the intricacies of options-trading strategies. As a comprehensive guide to basic investment concepts, it serves as an excellent appetizer for younger investors, especially with an appendix—from Agilent Technologies to Zion’s BanCorp—that conveniently lists the underlying names and symbols of penny pilot stocks and ETFs.

A competent guide for serious investors, not speculators looking to get rich quickly.