The Volatility Edge in Options Trading: New Technical Strategies for Investing in Unstable Markets
- ISBN13: 9780132354691
- Condition: NEW
- Notes: Brand New from Publisher. No Remainder Mark.
Product Description
“Jeff’s analysis is unique, at least among academic derivatives textbooks. I would definitely use this material in my derivatives class, as I believe students would benefit from analyzing the many dimensions of Jeff’s trading strategies. I especially found the material on trading the earnings cycle and discussion of how to insure against price jumps at known events very worthwhile.” —DR. ROBERT JENNINGS, … More >>
The Volatility Edge in Options Trading: New Technical Strategies for Investing in Unstable Markets
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May 20th, 2010 at 12:36 pm
A friend of mine in the trading industry suggested I read this gem of a book … within a single weekend I did just that … and what a gem it is!
Jeff Augen has put together a fine body of work in this book within which there are some seriously valuable nuggets of information.
The volatility spike graphs are a novelty in this business that anyone studying and trading volatility should benefit from. Essentially what he’s uncovering is “differential volatility”, in other words whether the volatility is being caused by buyers or sellers.
Typically, falling prices (due to selling action) will cause greater volatility, but not always. Sometimes the volatility is caused by rising prices. By understanding the direction in which the greater volatility of the underlying is occurring, the trader is able to position trades more appropriate to that skew. For example if the spikes indicate that volatility is caused by buying action then the calls may well be undervalued in advance of the next spike up. The trader can then make a double whammy trade, correct in direction and correctly in volatility.
Other nuggets include Jeff’s slant on expiration date and earnings cycle trading, and the concept of stocks pinning to the strike, all of which are essential chapters in the book.
You’ll be a more knowledgeable trader for reading this book and you should become a better trader for sure.
Rating: 5 / 5
May 20th, 2010 at 1:41 pm
One of the few trading books that instructs the reader on when, where, why, and how to place an option trade that has an excellent statistical probability of success. His Standard Deviation Spike Graphs are useful in that they can help to identify (by scanning), and capitalize (complete trading plan)on profitable opportunities. There are many more useful bits of info. The author is a professional trader using the techniques he writes about; many of which I (20+ yr option student/vet) use, and can confirm that they work. He is also correct in stating that successful options trading is darn near a full time job. For new traders beware, his advice is geared towards bloodied experienced traders, so practice for a while. Micheal Jordan telling us his secrets on how he drove the lane against Jabbar, Worthy, and Rambus is useful but be careful during practice (a pull-up perimeter jumper might be lower risk at first). As always, any advice on trading without a complete trading plan will fail to help any trader. If you are close to making it, continue to learn all that you can while knowing that this book will definitely help push you over the edge into long term trading success. This book is a must for any trading shelf, and is a steal at this price.
Rating: 5 / 5
May 20th, 2010 at 4:03 pm
An excellent book, with some novel ideas and concepts not covered in other books on options. Specifically useful are the following discussions:
- standard deviations and volatility charts
- discussions of liquidity and volatility swings
- hedging with VIX
- trading the earnings cycle
- trading the expiration cycle
- excellent coverage of all the main options strategies and spreads
Not a beginners book, and a year or two of decent options trading experience is recommended to get a good grasp of the concepts, but thats
great as there too many beginners book out there, all mostly the same!
Rating: 5 / 5
May 20th, 2010 at 5:37 pm
As someone that has been trading options for a couple of years now, I’m always looking for a new book to enhance my trading performance. This book definately is a must read for every options trader. Time and time again I see people trade options and lose money even though their opinion of the underlying is correct. This book gives the trader insight on when to enter and exit trades and why, which most options books fail to give.
The Volatility Edge also gives options traders methods on how to better graph historical volatility and underlying stock moves. These methods give the trader the ability to spot over priced and under priced options much easier.
Overall the book is great and easy to read. I hope the author continues to write on this topic.
Rating: 5 / 5
May 20th, 2010 at 7:40 pm
I have read many books on options — from Cox/Rubinstein’s mid-80s textbook treatise (now, sadly, out of print) to Bookstaber, to MacMillan, to Natenberg.
This is by far the best book on options I have read in years. A tremendous blend of the academic and practical, the mathematical and the tactical. Jeff’s explanations of the various moving parts of option pricing is superb. Great graphs, tables, lucid writing.
Excellent examples of trade progressions so you can see how the value of a position alters dynamically — whether over a single trading day such as expiration or over a number of days.
While this is aimed at a more advanced trader with a deeper understanding of both the mathematics of option pricing and descriptive statistics in general, I think even beginners should crack it open. Even if it is a bit of a struggle at first, you will be rewarded by reading it.
Highly recommended.
Rating: 5 / 5