Book Reviews
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- The Short Book on Options: A Conservative Strategy for the Buy and Hold Investor, by Mark D. Wolfinger
Book Description
THE SHORT BOOK ON OPTIONS is just that: a concise easy to understand primer that first teaches the basics of stock options and then offers a hands-on approach to using options in a conservative manner. Beginning with a description of what an option is and how an option works, THE SHORT BOOK ON OPTIONS takes the reader on a journey from learning the language of options to being prepared to trade.THE SHORT BOOK ON OPTIONS is especially useful for long-term buy and hold investors, owners of a self-directed retirement plan, investment club members or anyone who wants to increase the performance and safety of his/her investment portfolio. The author teaches a conservative strategy focusing on profitability and safety. By the time you finish reading this book, you will be eager (and prepared) to make your first options trade.
Options, when used strategically can help investors control investment risk, capitalize on market opportunities, or enhance investment income. In order to maximize these opportunities, market participants must first grasp the fundamentals of options, including the risk, features, and benefits. Options: Essential Concepts and Trading Strategies is an authoritative guide to options products and the tactics for incorporating them into an investment strategy. This easy-to-understand guide explains what options are, how they are priced, and how they are traded. Most importantly, it shows how options can enhance a portfolio's performance and help readers meet their investment objective. Covering Everything from the history of the options industry to the latest index options and products (including LEAPS, CAPS, and FLEX) this revised edition shows how to: Use options to protect profits, positions and portfolios; Make more informed, strategic decisions when buying or selling equity and index options- and avoid the most common pitfalls; Understand options pricing and forecasting theories without getting bogged down in the math.
Synopsis
From The Publisher:This authoritative guide offers an easy-to-understand, fundamental explanation of the goals and objectives of each player involved in the options trade. Along with this tactical information, traders will gain insight into trading strategies and options concepts. Includes coverage of LEAPs, CAPs, and industry indexes. This book is for both the institutional and individual investor (beginner to intermediate).
SynopsisOptions: The Investor's Complete Toolkit covers the qualitative aspects of options most visible to the public -- profit motivated trading. And, it goes much further -- highlighting the quantitative side of options for portfolio managers, risk managers, hedging strategists, financial engineers, and arbitrageurs. Starting with the institution features of the U.S. options market, the book explains how and why large pension funds, investment banks, and corporations have discovered unique advantages of options for controlling risks and capturing additional profits. It also shows how the development of options exchanges have allowed traders and portfolio managers to execute sophisticated strategies in hedging against risk..
With its in-depth coverage of the basics of options and option trading, this book is perfect for beginners as well as traders going to the next level. 50 charts, graphs & illustrations. More about commodities than stocks.
Buying and Selling Volatility explains, with the extensive use of diagrams, how one can profit from the volatility (or lack of it) of the price of an instrument, irrespective of the direction of the price. It provides a unique approach to the subject of options, seen purely from a volatility viewpoint. Clearly explains the connection between volatility and options without recourse to complex math. An accessible guide for students, it also offers experts a fresh look at instruments they have been trading for years. Contains risk management software (Microsoft excel) on disk similar to the high price commercial versions.
Approaches trading from the viewpoint of market makers and the part they play in pricing, valuing and placing positions. Covers option volatility and pricing, risk analysis, spreads, strategies and tactics for the options trader, focusing on how to work successfully with market makers. Features a special section on synthetic options and the role of synthetic options market making (a role of increasing importance on the trading floor). Contains numerous graphs, charts and tables.
From The Publisher:
SynopsisEvery day, market makers account for half a billion dollars in the option trade, bringing liquidity and stability to the commodity, bond, currency, stock, and futures options markets by being ready to buy or sell some quantity of any option at a specified price. The width of the bid/asked price spread determines the market maker's profit. But, if it's just buy-low sell-high what's the big mystery? Controlling option risk. Option risk is more complex and
comes in more varieties than most other investment risks. That's why traders, speculators, hedgers, scalpers, and market makers everywhere will draw considerable understanding and profit from this first book length guide to market making. Inside you'll find valuable information and tips on the economics of market making and the basics and terminology of options, covering fair value models, volatility, and differences between option markets; option risk, risk measurement, and the range of risk profiles possible in single one month trades with definitions, analytical tools, and strategies; synthetic price relations and how to master this almost risk-free core of option arbitrage trading; calendar spread risk and strategies for limiting it and still using time markets efficiently; delta-neutral and limited risk strategies for nonsynthetic market making, including the butterfly/ratio time spreads; and option market maker software listings and information. Provides an insider's insights on the complexities of the option market maker's world. In this increasingly competitive arena, Option Market Making gives you the tools you need to beat the odds - and make the trade.
Investing in options sounds so risky that many people fail to capitalize on this potentially lucrative opportunity. In non technical, easy-to-follow terms, this book thoroughly demystifies the options markets, distinguishes the imagined risks from the real ones, and arms investors with the facts they need to make informed decisions. 65 charts. 55 tables. Time values? Puts and calls? Striking prices? This straightforward guide thoroughly demystifies the options markets, enabling you to not only effectively maneuver within them, but to gain healthy returns from them. In non technical, easy-to-follow terms, Getting Started in Options, arms you with the facts you need to make informed decisions about choosing stocks, tracking options, selling calls, and much more. Updated - and including the latest information on understanding and controlling risk - this practical book shows you how to set up a plan based on your specific investment requirements; master all the terminology; buy and sell puts and calls; hedge and speculate like a seasoned investor; understand time values, striking price, and expiration - and use them effectively; read the market and spot the specific risks of each type of option; and profit in these exciting markets.
Book DescriptionNewly revised and updated to reflect the field's most recent developments, this professional guide supplies a complete introduction to options valuation and trading, from the working fundamentals to the most innovative pricing models and strategies used by today's top investment professionals. Advanced strategies, numerous expanded examples, and special Decision Structure sections enable practitioners to select an appropriate options strategy and evaluate its risks and rewards in various market environments. Features a complete appendix of option pricing strategies including implied volatility--and a spreadsheet format version of the Black-Scholes model.
An unprecedented book on option pricing! For the first time, the basics on modern option pricing are explained "from scratch" using only minimal mathematics. Market practitioners and students alike will learn how and why the Black-Scholes equation works, and what other new methods have been developed that build on the success of Black-Scholes. The Cox-Ross-Rubinstein binomial trees are discussed, as well as two recent theories of option pricing: the Derman-Kani theory on implied volatility trees and Mark Rubinstein's implied binomial trees. Black-Scholes and Beyond will not only help the reader gain a solid understanding of the Black-Scholes formula, but will also bring thereader up to date by detailing current theoretical developments from Wall Street. Furthermore, the author expands upon existing research and adds his own new approaches to modern option pricing theory. Among the topics covered in Black-Scholes and Beyond: detailed discussions of pricing and hedging options; volatility smiles and how to price options "in the presence of the smile";
complete explanation on pricing barrier options.
Synopsis
Customer CommentsChriss not only provides an explanation of the Black-Scholes formats, but also details current theoretical developments and expands upon existing research with his own approaches to modern option pricing theory. It's the first book to explain the basics of modern option pricing using only minimal mathematics. In Black-Scholes and Beyond, a clear, detailed book on modern option pricing, Wall Street professional and respected mathematician Neil Chriss provides a comprehensive, one stop treatment of the most important and potentially profit making of these theories. Chriss explains the modern theory of option pricing from scratch, with all necessary mathematics and finance included and accessible to the beginner. At the same time, Black-Scholes and Beyond provides in-depth coverage of newer option pricing models, theories and products, with enough detail for options market veterans. Topics covered include Cox-Ross-Rubinstein - Pioneering work on binomial trees, plus several new related methods of option pricing; Derman-Kani - The theory of implied volatility trees is covered comprehensively, but with less complexity than in the original work, and expanded for use with American options; and Implied Binomial Trees - Detailed discussion of the Rubinstein model and introduction of tools for increasing ease of use and utility.
SynopsisGreat book for Frequent Options Traders. I've purchased several books on trading options and this one is by far the superior book. It offers practical guidelines for choosing a strategy and outlines spreadsheet calculations you can set up to help you evaluate a trade. It also discusses many more topics than other books I've read, such as repair strategies. If you're going to buy one options book, this is it. A must for survival in the stock market. A simple, no frills explanation of options trading including calls, puts, call and put spreads, combinations, calendar spreads, repair strategies and LEAPS. A few simple techniques can increase your trading profits 20% per year or more. Sell puts against long stock positions. Hedge current investments to protect accumulated profits. Never worry about "bear markets" --- make money going up or down. This book is written in textbook fashion and should be read accordingly. No nonsense or get rich quick schemes here.
This book presents a full options trading course--Trading 101--by a well known options trading instructor. George Fontanills, who conducts seminars around the country has put all of his invaluable information and advice into an all-inclusive course that proceeds from introductory concepts to the more sophisticated strategies for the intermediate level trader.
From The Publisher:
The Options Course offers, for the first time in book form, a complete options trading course based on George Fontanills's seminar series, Optionetics: The Science of High Profit and Low Stress Trading. Using a systematic, step-by-step approach, this text equips you with all the tools - from basic concepts to sophisticated techniques - necessary for successful trading in the world of options. In addition, The Options Course is fully supported by a wealth of supplementary materials that speed and enhance the learning process. Included are fifteen appendices that serve as valuable resources, such as lists of trading media sources, options value and margin requirement charts, an option strategy quick reference guide, strike price and expiration month codes, and much more. Designed for investors at all levels of experience, The Options Course opens the door to the numerous opportunities offered by this form of investing.
Options for the Stock Investor is a clear, concise, and practical guide to making option strategies part of your long-term investment program. Based on the author's popular seminars that have instructed and inspired thousands of investors, Options for the Stock Investor will help you learn how to use options safely and effectively, then teach you to integrate options into a long-term investment program. Although misconceptions about options abound, and negative media coverage has caused many conservative investors to close their minds to the investment oriented uses of options, the fact is that options can be an important and strategic component of a well balanced portfolio. Options for the Stock Investor shows you how. Options for the Stock Investor helps investors gain knowledge and confidence by explaining the mechanics of options especially how an option position could affect a stock position or even become a stock position - and re presenting the basic and advanced strategies that are commonly practiced when options are used. Investors also learn an exclusive four-step thinking process that matches option strategies with market forecasts and specific objectives. Short-term traders will learn the nuances of option price behavior and the differences required in market forecasting when trading options versus trading stocks. Best of all, Options for the Stock Investor recommends specific strategies for investors with various investment goals and tolerances for risk.
SynopsisThe first reference manual (rather than a textbook) on options pricing formulas which every professional options trader and institutional money manager will need. Haug's "stamp collection" of formulas, complete with numerical examples and explanations, includes formulas used daily by some of the best talent on Wall Street. Includes a disk with computer programming code.
Written by a leading options trader and derivatives risk advisor to global banks and exchanges, this book provides a practical, real world methodology for monitoring and managing all the risks associated with portfolio management. Fills a big gap in investment literature--the only book to share complex options trading strategies and advanced risk management methods with trading professionals.
SynopsisDynamic Hedging is the definitive source on derivatives risk. It provides a real world methodology for managing portfolios containing any nonlinear security. It presents risks from the vantage point of the option market maker and arbitrage operator. The only book about derivatives risk written by an experienced trader with theoretical training, it remolds option theory to fit the practitioner's environment. As a larger share of market exposure cannot be properly captured by mathematical models, noted option arbitrageur Nassim Taleb uniquely covers both on-model and off-model derivatives risks.
From The PublisherOne of the country's top experts in options trading offers the very latest strategies in option trading techniques. Covering hedging, volatility, and pricing concepts, plus his own options philosophy, this material was first illustrated in the best-selling Options As a Strategic Investment.
SynopsisThousands of investors turn to Larry McMillan, leading finance writer and advisor, for expert advice on options. In this reader-friendly book, McMillan offers the latest information on the high-profit world of options trading. This up-to-date guide provides an information hungry marketplace with in-depth coverage of pricing strategies, volatility and risk control, hedging techniques and option philosophy, as well as key insights into the predictive power of options, the versatile option and buying and selling. Real world examples provide hands-on applications and clear illustrations to turn theory into practice.
From The Publisher:This blockbuster bestseller--more than 100,000 copies sold--is considered to be the bible of options trading. Now completely revised and updated to encompass all the latest options trading vehicles, it supplies traders and serious investors with an abundance of new, strategic opportunities for managing their investments. Examples make clear the power of each strategy in carefully defined market condition. The new edition covers long-term equity anticipation securities (LEAPs), preferred equity redemption cumulative stocks (PERCs), neutral trading, futures options, warrants, and standard portfolio analysis of risk (SPAN). The idea, of course, is to maximize earnings and reduce risk--no matter how the market is performing. Strategy techniques and examples show how to do it.
One of the most widely read books among active option traders around the world, Option Volatility & Pricing has been completely updated to reflect the most current developments and trends in option products and trading strategies. It covers pricing models, volatility considerations,basic and advanced trading strategies, and risk management techniques. Written in clear, easy-to-understand fashion, the book points out the key concepts essential to successful trading. Drawing on his experience as a professional trader, author Sheldon Natenberg examines both the theory and reality of option trading. He presents the foundations of option theory, and shows how this theory can be used to identify and exploit trading opportunities. He explains a wide variety of trading strategies and shows how to select the strategy that best fits each trader's view of market conditions and individual risk tolerance. New sections include: Expanded coverage of stock option; Strategies for stock index futures and options; A broader, more in-depth discussion of volatility; Analysis of volatility skews; Intermarket spreading with options.
After demonstrating why most popular options strategies don't work, Mr. Lyons reveals in his book Winning in the Options Market, the three strategies that can produce profits year after year. Specifically: A strategy not found in any other book, this method has produced an average annual return of 74% over the last 12th years. This extraordinary approach involves buying and selling options on two different stocks that are selling for the same price; Covered portfolio writing, a strategy which has produced a return about three percent higher than conventional covered call writing; Writing naked options-by reducing the risk through diversification, this strategy historically has produced very high returns.
Options: Perception and Deception provides the most rigorous methods ever published to