Get Rich with Options: Four Winning Strategies Straight from the Exchange Floor, 2nd Edition

By Lee Lowell

Quick Summary

Lee Lowell, a former options market maker on the New York Mercantile Exchange, shares four core options strategies that he used on the exchange floor and continues to use as an independent investor. The book covers selling naked puts, selling covered calls, replacing stock positions with deep in-the-money calls (DITM), and trading credit spreads. Lowell demystifies options for the average investor, emphasizing strategies that generate consistent income with defined and manageable risk.

Executive Summary

"Get Rich with Options" presents four options strategies from the perspective of a former professional market maker who made his living trading options on the NYMEX floor. Lee Lowell focuses on strategies that put time decay on the trader's side -- selling options rather than buying them -- and demonstrates how these approaches can generate consistent income while managing risk. The second edition updates the original with new examples, refined techniques, and additional discussion of market conditions since the 2008 financial crisis. The book is designed to be accessible to investors with basic options knowledge while providing actionable strategies for immediate implementation.

Core Thesis

The most consistent way to profit from options is to be a net seller of premium rather than a buyer. Options sellers benefit from time decay (theta), which works relentlessly in their favor. By focusing on four specific strategies -- selling naked puts, selling covered calls, buying deep in-the-money calls as stock replacements, and selling credit spreads -- investors can generate steady income while maintaining defined risk parameters.

Key Concepts and Terminology

• Time Decay (Theta): The erosion of an option's value as expiration approaches, benefiting the option seller
• Naked Put Selling: Selling put options without holding a short stock position, obligating the seller to buy stock at the strike price if assigned
• Covered Call Writing: Selling call options against stock already owned, generating income while capping upside
• Deep In-The-Money (DITM) Calls: Buying calls with strike prices well below current stock price as a lower-cost stock replacement
• Credit Spread: Simultaneously selling and buying options of the same type but different strikes, collecting a net credit

Practical Applications

1. Sell naked puts on stocks you would be willing to own at lower prices, collecting premium while waiting
2. Write covered calls against existing stock positions to generate additional income
3. Replace expensive stock positions with DITM calls to reduce capital at risk while maintaining similar upside
4. Use credit spreads to collect premium with defined maximum risk
5. Focus on selling options with 30-60 days to expiration to maximize time decay benefits

Critical Assessment

Lowell's market maker background provides authentic credibility and practical insight unavailable in academic options texts. The four strategies are well-chosen and genuinely useful for income-oriented investors. However, the title is misleadingly aggressive -- these are conservative income strategies, not get-rich-quick schemes. The book could better address the tail risks of naked put selling, particularly during market crashes. The risk management discussion, while present, deserves more emphasis given the potential for large losses in adverse scenarios.

Key Quotes

• "The key to making money with options is not buying them -- it's selling them."
• "Time is on your side when you're an option seller."

Conclusion

"Get Rich with Options" provides four practical, well-explained options strategies suitable for investors seeking to generate consistent income from their portfolios. Lowell's floor trading experience lends authenticity to his approach, and the focus on premium selling aligns with sound probabilistic thinking about options markets.