Praise for the Intelligent Option Investor

My old boss, the founder and CEO of Morningstar, JoeMansueto, was kind enough to take the time to read through an early version of my manuscript and has this to say:

The Intelligent Option Investor reflects Erik’s keen understanding of how companies create value for their owners, which is essential to successful option investing. In addition to showcasing Erik’s expertise in developing option investment strategies based on fundamental security analysis and a long-term time horizon, this book delivers the information in a way that’s accessible to individual investors, offering them the resources to use options to help them meet their financial goals.

Thanks for the support, Joe!

Understanding Options

Like I explained in my post The Essence of Intelligent Option Investing, the The Intelligent Option Investor is split into three parts. Here's the introduction to Part I, which covers everything an intelligent investor needs to know about options and option pricing.

The Essence of Intelligent Option Investing

What does it mean to be an Intelligent Option Investor? 

The following excerpt from my book (on schedule to ship in August!) explains its essence. I also outline why, even if you never make an option transaction in your life, understanding what the option market is saying will give you an advantage as an equity investor.

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Introduction

You have a tremendous advantage over algorithmic trading models, investment bank trading desks, hedge funds, and anyone who appears on or pays attention to cable business news shows. This book is written to show where that advantage lies and how to exploit it to make confident and successful investment choices. In doing so, it explains how options work and what they can tell you about the market’s estimation of the value of stocks.

Even if, after reading it, you decide to stick with straight stock investing and never make an option transaction, understanding how options work will give you a tremendous advantage as an investor. The reason for this is simple: by understanding options, you can understand what the rest of the market is expecting the future price of a stock to be. Understanding what future stock prices are implied by the market is like playing cards with an opponent who always leaves his or her hand face up on the table. You can look at the cards you are dealt, compare them with your opponent’s, and play the round only when you are sure that you have the winning hand.