Options Trading in Practice

Every options trade creates obligations. Understanding them is the foundation of a sound trading process.

In Options Trading in Practice, João Lourenço draws on his experience as an engineer and individual trader to explain how he selects opportunities, sizes positions, manages assignments, and learns from mistakes.

Across 27 chapters, the book connects options fundamentals with the decisions traders face in practice: choosing an underlying company, evaluating a premium, accepting downside exposure, and deciding when to close, roll, or hold a position.

Inside, you will learn how to:

• Understand calls, puts, pricing, implied volatility, and the Greeks.
• Evaluate cash-secured puts, covered calls, the wheel strategy, and credit spreads.
• Distinguish premium received from profit-and margin requirements from actual financial obligations.
• Assess concentration, assignment funding, and portfolio risk during market declines.
• Plan exits and respond to earnings, dividends, and early assignment.
• Build watchlists, maintain a trading journal, and automate research with an illustrative Python scanner.
• Recognize the limitations of backtesting and evaluate results after costs.

Worked examples, payoff diagrams, exercises with answers, and practical checklists make the concepts easier to apply. Additional sections cover CFD risks and Portuguese tax considerations.

Written for readers learning options and traders seeking a more structured process, this book offers a candid account of the choices, trade-offs, and mistakes behind real trading decisions.

Build a process you understand, measure, and can follow when markets become difficult.