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how | trade options JON NAJARIAN New York + Chichester + Weinheim + Brishane + Singapore + Toronto I wrote this book to describe how I trade options. No statement in this book should be construed as a recommendation to purchase or sell a security, or to provide investment advice. You should understand that as a professional ‘options market maker, I have significantly lower commissions, interest rates, and tax rates than any retail investor. You should always consider commis- ‘sions and taxes prior to making any Investment. Options involve risk and are not suitable forall investors. Prior to buying or selling an option, you should receive and read Characteristics and Risks of Standardized Options, a docu- ment written and provided by the Options Clearing Corporation (OCC). Copies of this document may also be obtained from your broker or from any exchange on which options are traded. If you choose, you can write to the Options Clearing Corporation at: 440 S. LaSalle St. Sulte 2400 Chicago, IL {60605, You can also download pertinent information about options from their Web site: ‘This book is printed on acidtree paper. © Copyright © 2001 by Jon Najarian All rights reserved. Published by John Wiley & Sons, Ine. Published simultaneously In Canada, [No part ofthis publication may be reproduced, stored ina retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Section 107 or 108 of, the 1976 United States Copyright Act, without either the prior written permission fof the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (078) 750-8400, fax (978) 750-4744, Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, inc. 1605 Third Avenue, New York, NY 10158-0012, (212) 850-6011, fax (212) 850-6008, E-Mall: PERMREQGWILEY.COM, “This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. Its sold with the understanding that the publisher is not engaged in rendering professional services. I professional advice or other expert assistance Is required, the services of a competent professional person, should be sought. Library of Congress Cataloging in-Publication Dat Najarian, Jon, 1957~ How I trade options/ Jon Najarian, 'p. cm.—(Wiley online trading fora living) ISBN 0-471-31278-9 (cloth: alk. paper) 1. Options (Finance) 2. Electronle trading of securities, 1. Title. I, Series. HG6024.43 N34 2001, 1332.687228—ae21 00-043738 Printed in the United States of America, wesTes4g2t For my daughter Tristen, because when she smiles at me it feels like I'm kissing God.