Options Installment Strategies: Long-Term Spreads for Profiting from Time Decay

An “installment strategy” in its most basic form, combines two options, one long-term position and one short-term. This strategy is designed as a conservative, no-cost method to either eliminate risk for future trading when stock is owned; or to fix the price for a future purchase of the underlying security.Portfolio managers and experienced individual traders face a chronic problem – risk versus time. This goes beyond the well-known time decay of options and expands to the ever-present market risk to an underlying security. How do you execute a successful, conservative strategy and eliminate or reduce market risk? In this book, a range of effective and creative strategies set out a conservative hedging system. This involves the combination of long-term long positions offset by short-term short positions in various configurations. Options Installment Strategies presents variations on the well-known calendar spread and demonstrates how specific strategieswork well in short-term swings and even during extended periods of consolidation.

About the Author

Michael C. Thomsett has been writing for a living since 1978 and has published more than 90 books. These include 12 options books. His best-selling Getting Started in Options has been published in ten editions and sold more than 300,000 copies. The 10th edition has been renamed Options (The Essential Guide for Getting Started in Derivatives Trading) .  He also has developed and presented options webinars, and operates a financial education website, Money Craft. Thomsett is a frequent speaker at trade shows and investment conventions. He blogs on Seeking Alpha, Options Money Maker, Steady Options and other social media.