Trading Options to Win: Profitable Strategies and Tactics for Any Trader
S. A. Johnston
ISBN: 978-0-471-22685-7
Hardcover
306 pages
June 2003



A fresh investment approach to an ever-changing market
In this unique and engaging treatise on the art and science of speculation, expert S. A. Johnston combines the profitable elements of banking, bookmaking, and gambling-three other ways of making money with money-with trading, to provide readers with a fresh new approach to trading the market. Written by a trader for a trader, Trading Options to Win gives readers a framework for using logical analysis to uncover profitable opportunities that they would otherwise miss. Johnston develops a speculative method that traders can use to consistently find and manage profitable trades. He then backs his talk up by detailing three months worth of trades using his successful method. For investors looking to move beyond the realms of technical and fundamental analysis, Trading Options will be the guide of choice.


Editorial Reviews
Praise for Trading Options to Win "Johnston has put together a very thorough work on futures options, and many stock option traders would learn something from this book as well. I especially like his reliance on expected returns and probability to choose the best trade to make."
–Lawrence G. McMillan, President, McMillan Analysis Corp.
bestselling author, Options as a Strategic Investment and Profit with Options "Entirely different from any other book on options, thank goodness. I fall asleep immediately and without fail after opening a book on options, but not this time. [This book is] readable in one or two sittings with fascinating cases that really illustrate the principles. It may be a delusion, but I think I understood most of Trading Options to Win. Some chapters on specific strategies I will definitely be reading again and trying to use in my own trading."
–Barbara Rockefeller, founder, Rockefeller Treasury Services
author of The Global Trader and CNBC 24/7 Trading "Stuart Johnston’s Trading Options to Win is an intelligent, literate, and informative description of the many ways to trade options that also explains why these trading strategies work. Those new to options trading absolutely need this book. Experienced options traders should not miss it."
–Desmond MacRae, freelance business writer featured in the Financial Times and New York Post In Trading Options to Win: Profitable Strategies and Tactics for Any Trader, S.A. (Stu) Johnston shares thirty years of trading experience to help you gain an advantage and improve the profitability of your trading within the options and futures markets. Unlike some books, which offer a single "sure-fire" system for turning a profit, Trading Options to Win examines a broad methodology and philosophy of trading that puts the likelihood of profits on your side of the table. Attempting to minimize risk, establishing a discipline for entering and exiting trades, and claiming a healthy return on capital (ROC) can be difficult in the options and futures markets. But with Trading Options to Win as your guide, you will quickly learn how to do this–and much more.
From the Inside Flap
If you intend to trade options and win, you need a definable advantage. The nature of the advantage, whether historical, statistical, or any other, doesn’t really matter. What does matter is recognizing and seizing the advantage whenever you can. In Trading Options to Win: Profitable Strategies and Tactics for Any Trader, S.A. (Stu) Johnston shares thirty years of trading experience to help improve your trading profitability in the options and futures markets. Unlike some books, which offer a single "sure-fire" system for turning a profit, Trading Options to Win examines a broad methodology of trading that puts the likelihood of profits on your side of the table. Through thoughtful insights and detailed examples of actual and hypothetical trades, Johnston illustrates disciplined methods for selecting strategies to use and trades to enter, tactics to maintain your advantage once you’ve entered a trade, and organized methods that allow you to protect your capital when a trade doesn’t initially work in your favor. Written in a lively, conversational style, this book looks at the ultimate necessity in trading–the recognition, avoidance, and control of diverse risks–and then shows how the careful use of options makes this task much easier. Trading Options to Win also offers a thorough look at five main tactics of defense to use when trading options by themselves or options with assets, because there are far more ways to keep your capital where it belongs–in your pocket–than by simply exiting a temporarily unsuccessful trade. After learning how to protect yourself in the options and futures markets, Trading Options to Win shows you, in detail, strategies designed to give you an advantage in the market, including:
•Profiting from knowing where a market is not likely to go
•Profiting no matter which direction a market moves
•Profiting when a market doesn’t move
•Profiting in long-lasting "dull" bear markets
•Profiting when the optimists of the world run amok
•Profiting when the optimists, inevitably, run out of capital
•And much more
If you want to improve your trading, and you already know the difference between a put and a call, and know what a premium, a striking price, and an expiration date are, then Trading Options to Win is the book for you.


Table of Contents
Preface.
Chapter 1. Making Money with Money. Chapter 2. On the Trail of a Method: Risk, Leverage, and Markets. Chapter 3. Profitability 101: Expectation and Options. Chapter 4. Just the Facts, Ma'am: Avoiding Moonshine, Morons, and Myths. Chapter 5. No Hammer, No House: The Tools of the Trader. Chapter 6. Thomas More's Revenge: A Strategy for All Seasons. Chapter 7. Apocalypse Never: The Uses of Defense. Chapter 8. Don't Just Stand There, Do Something: The Straddle. Chapter 9. Don't Just Do Something, Stand There: The Strangle. Chapter 10. Hi-Yo, Yogi!: Riding the Bear. Chapter 11. The King of Strategies: The Martian Ratio-Spread. Chapter 12. Every Once in a While: The Picador. Chapter 13. Pay Me after Lunch: The Endplay. Chapter 14. Filling in the Cracks: Ideas, Understanding, and Winning. Appendix A: Studies of Historical Gross Movement in Selected Markets, 1990-2002. Appendix B. Distribution of Contract Highs and Lows in Selected Markets 1980-2002. Index.