Description of The Investor's Toolbox, 1st Edition
After a turbulent three years, equity markets are returning to their historical norm of single digit percentage annual returns.
Investors want to continue investing, but are concerned about the risk of doing so. The events of the past two years have heightened this risk aversion. But at the same time new techniques are now available to private investors that allow them to tailor their risk much more precisely, and at the same time to enhance their returns. Options are one way they can do this, but there are other instruments too, including individual stock futures, covered warrants, CFDs, exchange traded funds, and spread betting.
This is the first book to set out all the choices open to investors. It explains how each of the derivative instruments works, the costs of dealing, the relationship to underlying share prices, and the risks involved. It shows how these instruments can be used alongside ordinary equity ownership, and provides examples of strategies designed to achieve specific ends.
In short, Peter Temple's guide is what ordinary equity investors have been waiting for. It will give them confidence to step up from simple share ownership to the wider opportunities now available.
1. Derivatives history
- Introduction
- Early days
- Help for farmers
- The magic formula
- Futures markets proliferate
- New products take the limelight
2. Basic concepts
- Underlying
- Contracts
- Cash settlement
- Expiry dates
- Fair value
- Gearing
- Hedging
- Indexes
- Margin
- Short selling
- Time value
- Volatility
3. Futures
- Basic futures
- Futures prices
- What you can trade
- Beware the professionals
4. Contracts for Difference (CFDs)
- CFDs basics
- CFD mathematics
- CFD rules of the road
- A final word on gearing and risk
5. Spread betting
- Advantages of spread betting
- Margin
- Types of bet
- A final word
6. Options
- What is an option?
- Calls and puts
- In and out-of-the-money
- Volatility
- Options prices and how they are calculated
- Where to find options
- Option trading as speculation
- Option trading as insurance
- Postscript - writing options
7. Warrants
- Traditional warrants
- Covered warrants
- Basic strategies
- How the warrant market may develop from here
8. Exchange-Traded Funds (ETFs)
- History of ETFs
- How do ETFs work?
- The pluses and minuses
- Where are ETFs quoted?
- Why you should consider using ETFs
- Where ETFs go from here
11. Trading Strategies II - Options and Warrants
- Geared speculation
- Hedging
- Writing options
- Complex strategies
12. Developing your plan
- Trading rules
- Money management
- Trading tips for specific tools
- Developing your plan by looking at your assets
- Using charts and other software
Appendices
1. Derivatives comparison chart - dealing specifics
2. Finding the information
3. Software
4. Further reading
5. Glossary of web sites
Index
About Peter Temple
Peter Temple has been working in and writing about financial markets for the last 33 years. After an 18 year career in fund management and stockbroking, he became a full time writer in 1988.
His articles appear in the Financial Times, Investors Chronicle and a range of other publications. He has written more than a dozen books about investing, mainly aimed at private investors.
He and his wife live in part of a converted bobbin mill in the Lake District.
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