TRADING EDUCATION · TOPIC
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An independent companion to Herbert B. Mayo’s eleventh edition, covering all 20 chapters with original worked examples, explained exercises, appendix labs, reusable worksheets, a portfolio capstone and an indicator-only moving-average study.
Buying a put alongside stock changes the shape of the combined position’s payoff. It costs money, preserves upside participation, and can limit downside over the option’s protection period. The essential calculation includes the shares, strike, premium,…
Treat premium as compensation for an obligation. A useful options-income process measures net outcomes, tail exposure, and operational risk rather than equating cash received with profit earned.
Understand calls and puts through rights, premium, strike, expiration, and contract sizing, including why in-the-money does not necessarily mean profitable.
Calculate option spread percentages and contract-dollar costs, correct the midpoint, and negotiate limit orders without confusing delta with probability of profit.
Understand gamma near expiration, changing delta, long-option convexity, and the limits of strike, IV-rank, and put/call interpretations.
Understand the wheel through assignment and covered-call payoff examples, portfolio risk checks, and a clearly limited stock-trend research experiment.
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