Outline: Part I - Basics

"You underestimate the power of the Dark Side. If you will not fight, then you will meet your destiny."

- Darth Vader to Luke Skywalker, Episode VI

The first part will be a quick overview of equity basics followed by option fundamentals. I'll explain what options are and why one would use them. Then I'll emphasize how risky they are if you aren't using a strategy or you don't understand its risks!

Part I will be composed of four chapters. Here's a list plus a few topics that will be covered in each:

1. Equity Basics: Quick run through of what is a stock, index, ETF, and financial derivative.
2. Option Basics: What is an option?, Long/short call, long/short put
3. Fundamentals: Strikes, premium, moneyness, expiration, exercise, assignment
4. Classifying Options and Strategies: Directional assumption, profits and losses, debits and credits, volatility assumption

The first two chapters are just to bring everyone to an equal footing. Ideally one would already have some of this knowledge. Chapter three may need to be switched or merged with chapter two since you need to know about this to explain options. The last chapter is just some ways to categorize the different strategies. I'll be explaining what they mean here.

General Outline

"This is some rescue! You came in here, but didn't you have a plan for getting out?"

 - Princess Leia, Episode IV

I've been drawing up an outline of what topics I should include in the text and I've divided them into 4 parts. Each part will be composed of multiple chapters, and each of those further sub-divided into sections. What I have in mind is:

1. Basics: A quick overview of equity basics followed by option fundamentals
2. Strategies: The bulk of this text. A comprehensive description and classification of option strategies
3. Adjunct Material (Needs a better name): More advanced material on options. Also includes case studies and lookup tables of strategies based on different criteria
4. Appendices: Support material

The first two parts are pretty self-explanatory for now - I will detail each part in future posts. Part III is really just a dumping ground for topics I think are good to know. This will include the Greeks and some math on probabilities. I'm also planning to put a few case studies, although that will be one of the last things to write. The Appendices is where the index and references will be. I will also be including a short guide on using Excel to calculate probabilities and such, Finally, I'll also include a list of learning materials that I learned from or found interesting.