Product Details

• Amazon Sales Rank: #618119 in Books
• Published on: 2002-05
• Original language: English
• Binding: Perfect Paperback
• 112 pages

About the Author
Dr. Elias holds advanced degrees in Engineering and economics and was able to give up his day job in 1997 to become a full time investor using this approach. Despite an uneven market, Dr. Elias generated $16,000/month for an annual return of over 200% by applying this system to a handful of stocks in 2001.

Customer Reviews

more than 90 % profitable
This review refers to the Sept 2003 newly published hardcover expanded second edition of the book . In this edition the author goes beyond using options into the art of picking winning stocks. There are quite a few new ideas including : (1) How to use sentiment and price action to pick winning stocks. The author uses two indicators when combined together can signal entry points giving over 100% profitability . I personally back tested and actually traded this approach with over 90% accuracy (2) How to generate quick cash by using a short squeeze and earnings squeeze strategy. This is presented in a stepwise procedure which is easy to follow.(3) How to recognize when smart money is buying or selling .
(4) How to recognize when smart money is buying under the radar without actually affecting price movements. (5) How to avoid being shaken out and selling before a big run up. And more ideas too many to mention. (6) How to quantify fear and combine it with a common technical indicator to spot general market reversals and I could go on and on.
One of the Chapters that I found most useful for long term investors ins Chapter 14 where the author presents a simple system using an easy calculation that you have to do once a week to determine when to sell a stock or buy for the long term. This chapter allows you to recognize pending long term reversals using what the author calls CD chars while a stock is near its high. Real life stock illustrations are given throughout the book.

The author adds a special chapter with ideas on how to apply the concepts in the book to specific situations that are frequently encountered and shows how to cash in on such situations.
What impressed me most is that the concepts are innovative and not accessible in other books that I have read. On the other hand they are simple to follow especially with the numerous real market examples given by the author.

What I found different about this book
As an experienced options and stock trader and investor, I thought It will be worthwhile relaying what I found different about this book. The biggest challenge in attaining consistent profitability in using options is successful stock selection and relative timing.
The first unique aspect of this book is that it offers simple timing techniques illustrated by actual stock charts where you could even come out ahead if the stock moves against your position by 10% or more. The author uses these charts to show you how to maximize your profit by timing your move when most of the crowd is doing the opposite and willing to pay you hefty premiums.
Another interesting strategy in this book is what the author calls "half-half option selling strategy" which allows you to combine option selling and stock purchase techniques to buy stocks below market while generating cash . The author incorporates simple support and resistance in a unique way to enhance cash generation. I have implemented this strategy myself and was surprised by the fact that I was able to accumulate shares of a stock at 25% below the present market value even though the stock dropped 30% since I started implementing this approach.
The author also shows you how to generate cash multiple times per month on the same stock. Take the example of LSI in the book where the author achieves 500% profit by using techniques in this book to reduce his cost basis from $10 to $5 and then selling the stock at $25. The example on MCK shows you how you can turn a big loser into a winner. Even as the stock drops from $93 to $34 using techniques in this book you can end up with a small $220 profit on 1000 shares which beats a loss of $59,000 if you held on without using the techniques in the book or $9300 if you placed a 10% stop loss. These are just two of the many examples in the book.
A third approach is what the author describes as Boxing strategy where you will in effect box a stock between two positions dictated by the timing the author uses. You then close each position as the stock moves in a certain direction with both positions yielding a profit. This is a great strategy that I found useful in raising cash on stocks I own while adding more shares at lower cost.
Another unique approach is the authors examples on how to generate cash on low priced stocks (many around these days) detailed in chapter 11. I always wanted to find a way to cash in on those type of stocks but was rarely successful since they are usually highly manipulated and seem to go in the opposite direction after I got in. This chapter has many interesting strategies to use but the one that intrigued me most was the example on Enron. By recognizing the dramatic increase in put premiums on bankruptcy rumors one could have locked in a purchase price of 80% below the current price and then pocketed the profit on a short term bounce which was bound to come due to short covering. I knew from experience that there is a common thread in stocks undergoing bankruptcy, a high level of short interest with negative sentiment but could not figure out how to cash in. This book provided the missing link! These two facts mean high option premiums and by selling the right option, all I have to do is wait for the short covering and cash in. At the same time the hefty option premium will mitigate any stock drop preventing me from a panic reaction.
This book does not go into extensive detail theoretical details on option probability and pricing. If you are interested in such information I would recommend the book " Guide to probability, volatility and timing". If you are interested in learning practical strategies with charts and real life examples to generate income and enhance profits , this book will significantly advance your way to reaching this goal.

Absolutely unbelievable profits
I have purchased this book and belong to the author's private chat room and was able to achieve consistent double digit monthly returns. This is based on an earnings squeeze strategy that I have been using by applying the principles described in the book using a combination of option and stock positions.
My strategy involves using the idea presented by the author in the book and chat room on betting against the majority but with the trend. I have used this concept to look for stocks showing a high level of negative crowd sentiment as reflected by a high put volume and short interest but positive technical signals. Such indicators will result in a lethal profit combination at earnings time. So every week I identify stocks reporting earnings that show such signals and then take a combination of stock and option positions using strategies in the book.
I would admit that belonging to the authors private internet chat room ,which is kind of expensive in absolute terms but cheap when you consider the returns, was a big help. The good news is that many investors will be soon able to experience similar returns by belonging to the public version at a much lower cost . I decided not to mention the site name to keep the review objective .
The author is also accessible to the subscribers through e mail and phone. He even has his phone number in the book and I was able to discuss a specific recommendation he made on the chat room with him before taking action. With little practice and experience the ideas presented by the author work and I have my bank account to show for it.