Author: CHEN, Wai-Yee
Publisher: Oex Publishers Pty Ltd
ISBN: 9780 9807 15101
Reviewed by: Mark Boulton
Have you ever considered investigating or finding out more about financial options? If so, this book could be a good starting point. If you have an existing financial strategy using options, this book may assist in adding some more strategies to your repertoire. Alternatively this can be a good book to alert you to what is available, and you could find an adviser to deal with the details (hint – the author would likely be a great adviser). By the way this book focuses mostly on ASX listed share options/indices.
There are four general investment mentalities (through following four characters) covered in this book – risk averse, get rich quick, slow and steady, and businesslike. Hopefully one to suit every reader’s mindset.
Unless you are already very familiar with options, you could easily get stuck with trying to understand everything in this book in one read. However after quickly reading the book without trying to understand absolutely everything, what I found great was that there is a shopping list of strategies that could be considered for reducing risks, optimising the purchase or sale of shares, or for profiting from a particular view. Once you find a strategy you like, you can to some extent revise backwards to fully understand its basis, and then work forwards to review the risks of the strategy (even including whether your thought process is logical or not). You are not going to need to remember every detail.
There is an associated website – (had a sneak preview – still under construction at time of writing this review) http://www.optionswise.com.au. This has some applications that look like they will be very helpful (maybe nearly mandatory) in assisting you with pricing options and how much cash-margin you will need to put down (even for multiple transactions). One very neat application is the “strategy optimizer” that recommends a strategy based on completing some questions and selection criteria. Be aware that you will most likely not understand these online applications if you have not been familiarised with options.
One minor criticism of this book, is that I was looking for more of a bridge from buying and selling shares, through to using options. I would have loved to see a chapter or section dedicated to detailed considerations regarding buying a share versus buying a call option, and selling a share versus buying a put. This is definitely covered – but I would have liked this basic information placed under the microscope a lot more.
This is a very commendable and helpful book, and one that I will certainly refer to from time to time. The author is convincingly very knowledgeable on the topic, and is generous with her experience. This book would certainly give most investors and speculators some more options to consider (boom boom J).
Mark Boulton is a member of the AIA.