Options on Futures, Workbook: Step-by-Step Exercises and Tests to Help You Master Options on Futures: New Trading Strategies
Product Description
Master Options on Futures Trading By Testing Your Knowledge on Key Concepts and Strategies John Summa and Jonathan Lubow provide an invaluable opportunity to explore your understanding of Options on Futures: New Trading Strategies in their companion Options on Futures Workbook. The workbook chapters correspond directly to the chapters in Options on Futures: New Trading Strategies. The authors begin by summarizing the key concepts of each chapter in Options… More >>
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June 19th, 2010 at 12:56 pm
I like to buy straddles. That makes me a debit spreader. Since this book is all about CREDIT-spreads, you’d think that I would stay away from it.
Nevertheless, I’m glad that I bought the book and consider it to be an important addition to my library. The authors do a good job of:
– explaining why speculators should be interested in options on futures;
– explaining why speculators should think twice about buying premium… as opposed to selling it;
– showing how to take and then adjust positions on certain basic strategies.
The book is:
–less theoretical and more immediately useful than Natenberg’s “Option Volatility & Pricing”;
–better organized than Caplan’s “The New Option Secret”;
–more focused and informative than Spears’ “Commodity Options”, and…
–less combative than Gallacher’s “The Options Edge”.
To be honest, I’m glad that I’ve had a chance to read and re-read ALL these books — so I’m not saying that you shouldn’t get any of them. It’s just that Summa and Lubow make an especially good case for credit-spreading.
One last point: “Options on Futures” is a must-have if you follow the recommended trades on…
Rating: 5 / 5
June 19th, 2010 at 2:18 pm
Why do hardback books cost so much? And what makes this one sell for $65 and others that are better sell for $35? Who comes up with the pricing on these things?
John Summa makes a strong case for selling credit spreads in the futures market in this volume. It is a good read for beginners, but really you can find the same material on the internet for free just by doing a few key word searches. The way he presents the material is authoritative and would have one believing that his conclusions are gospel.
In reality nothing could be further from the truth. You can lose money doing credit spreads, and yes, have bad streaks where 4 or 5 in a row go against you. I know because I am a fan of credit spreads and do them in the stock market quite a bit. Typically you are risking more than 2-1, that is, risking more than twice as much as you can make so when you hit a bad streak it can set you way back. Credit spreads are just another tool; you still need to be decent at choosing your positions.
I belong to Summa’s mailing list as well. His mantra is selling options, selling options, selling options. A quote from one of his newsletters: “The amount of wealth being transferred to option sellers from option buyers is staggering.” It’s irresponsible statements like that which keep me out of his fan club. Ask Nicolas Talib (“Fooled by Randomness”) what HE thinks of selling premium as a core strategy.
Selling option premium is one of those strategies that makes a little money most of the time and then one day a catastrophy hits and ruins you.
I have two major issues with the book, which I concede is a well-written work that I did enjoy reading. The first is that the examples given are unrealistic. The premiums collected on the SPX credit spread examples in the first half of the book that are way out of the money like that just don’t exist.
The second is the risk-management suggestions on some of the scenarios. In particular, a ratio spread (a complicated spread to begin with) using a futures contract as a hedge that goes against us – we manage this risk by continuing to add legs to this position until what we have left is a mess of spaghetti costing maximum commissions where the same risk/reward ratio in the end could have been attained by simply buying an option.
I still recommend reading it to those learning about option spread strategies who like to learn by having a book on their nightstand. But buy it used. Hey, how about my copy?
For me, books are either a 1 star, 3 star, or 5 star. The 5-stars are the classics that are too good to ever remove from your bookshelf, like many of the books I recommend at winningfinancialstrategies.com. The 3-stars get sold on ebay when the bookshelf overflows. The 1-stars go to Salvation Army.
Rating: 3 / 5
June 19th, 2010 at 3:58 pm
I recently carefully studied your book entitled “Options on
Futures” and found it just fascinating. Of course, I have long been a
seller of SPX cash market options and your book broadened my understanding
of what can be done in the futures and options on futures markets. Your book
and workbook are very clear, understandable, and applicable.
Rating: 5 / 5
June 19th, 2010 at 6:35 pm
This is a very simple, canned presentation. The book is primarily boilerplate that may be read free on any exchange website. There may be value for the novice here, but anyone with experience will put the book down 15 minutes after picking it up.
Rating: 1 / 5
June 19th, 2010 at 8:36 pm
Very good treaty on trading options as a net seller, sellers being the options traders in the market who make the real money. Well written, clear examples, margin reqs covered thoroughly…
Rating: 5 / 5