Trading Option Greeks

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Trading Option Greeks : How Time, Volatility, and Other Pricing Factors Drive Profit

Business & Economics

Author - Dan Passarelli
Publisher - John Wiley and Sons
Pages - 330
ISBN - 047088519X


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Detail - Veteran options trader Dan Passarelli explains a new methodology for option trading and valuation. With an introduction to option basics as well as chapters on all types of spreads, put-call parity and synthetic options, trading volatility and studying volatility charts, and advanced option trading, Trading Option Greeks holds pertinent new information on how more accurate pricing can drive profit. Most options traders focus on strategies such as covered calls, vertical spreads, butterflies and condors, and so on. But traders often don't know how to use the "greeks"—the five factors that influence an option's price—to trade more effectively. The "greeks" (Delta, Gamma, Theta, Vega, Rho) are tools to measure minute changes in an option's price based on corresponding changes in: Interest rates Time to expiration Price changes in the underlying security Volatility Dividends Using the greeks can lead to more accurate pricing information that will alert an option trader to mispriced derivatives that can be exploited for profit. In straightforward language and making use of charts and examples, Passarelli explains how to use the greeks to be a better options trader.

Trading Options Greeks : How Time, Volatility, and Other Pricing Factors Drive Profits

Business & Economics

Author - Dan Passarelli
Publisher - John Wiley & Sons
Pages - 341
ISBN - 1118133161


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Detail - A top options trader details a practical approach for pricing and trading options in any market condition The options market is always changing, and in order to keep up with it you need the greeks—delta, gamma, theta, vega, and rho—which are the best techniques for valuing options and executing trades regardless of market conditions. In the Second Edition of Trading Options Greeks, veteran options trader Dan Pasarelli puts these tools in perspective by offering fresh insights on option trading and valuation. An essential guide for both professional and aspiring traders, this book explains the greeks in a straightforward and accessible style. It skillfully shows how they can be used to facilitate trading strategies that seek to profit from volatility, time decay, or changes in interest rates. Along the way, it makes use of new charts and examples, and discusses how the proper application of the greeks can lead to more accurate pricing and trading as well as alert you to a range of other opportunities. Completely updated with new material Information on spreads, put-call parity and synthetic options, trading volatility, and advanced option trading is also included Explores how to exploit the dynamics of option pricing to improve your trading Having a comprehensive understanding of the greeks is essential to long-term options trading success. Trading Options Greeks, Second Edition shows you how to use the greeks to find better trades, effectively manage them, and ultimately, become more profitable.

How to Calculate Options Prices and Their Greeks : Exploring the Black Scholes Model from Delta to Vega + WS

Business & Economics

Author - Pierino Ursone
Publisher - John Wiley & Sons
Pages - 224
ISBN - 1119011620


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Detail - Too often option payoffs are merely based on a two-dimensional approach consisting of a P&L versus underlying at expiry as is evident in most existing literature. This is misleading as the Greeks can make or break a strategy during its lifetime. In How to Calculate the Value of Options Prices and their Greeks, emphasis is placed on a deep and thorough understanding of the Greeks (first, second and third order), informing the reader how the pay-off of an option (strategy) will be influenced by time, underlying, strike and volatility. The book fully explains the distribution of the Greeks along a range of strikes (the whole range wherein an option has optionality), assisting the reader to understand how the Greeks are changing in relation to different strikes, but also in relation to time, volatility and underlying. Further it will discuss many trading strategies such as spreads, straddle, strangle, butterflies, kurtosis, vega, and convexity to name but a few. The author discusses how hedging strategies on the gamma can make or break a P&L. The text begins by guiding the reader through the more basic options, such as the put-call parity towards the concepts of probability distribution and volatility. The book then covers the main Greeks (delta, gamma vega and theta) followed by an in-depth discussion of several trading strategies including a four dimensional approach of P&L versus strike, underlying, volatility and time to maturity.

Trading Options for Edge : Profit from Options and Manage Risk Like the Professional Trading Firms

Business & Economics

Author - Mark Sebastian
Publisher - Walter de Gruyter GmbH & Co KG
Pages - 238
ISBN - 150150567X


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Detail - If you have experience in option trading, or a strong understanding of the options markets, but want to better understand how to trade given certain market conditions, this is the book for you. Many people have some knowledge of trading strategies, but have no idea how to pull it all together. Mark Sebastian's latest book will teach trade evaluation, using Greeks, trading various spreads under different market conditions, portfolio-building, and risk management. Sebastian's approach will help traders understand how to find edge, what kind of trade under what conditions will capture edge, and how to create and successfully hedge to help you build your own personal Goldman Sachs or Merrill Lynch. The book demonstrates how to structure a portfolio of trades that makes more money with less risk.

Option Trading : Pricing and Volatility Strategies and Techniques

Business & Economics

Author - Euan Sinclair
Publisher - John Wiley & Sons
Pages - 336
ISBN - 9780470642528


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Detail - An A to Z options trading guide for the new millennium and the new economy Written by professional trader and quantitative analyst Euan Sinclair, Option Trading is a comprehensive guide to this discipline covering everything from historical background, contract types, and market structure to volatility measurement, forecasting, and hedging techniques. This comprehensive guide presents the detail and practical information that professional option traders need, whether they're using options to hedge, manage money, arbitrage, or engage in structured finance deals. It contains information essential to anyone in this field, including option pricing and price forecasting, the Greeks, implied volatility, volatility measurement and forecasting, and specific option strategies. Explains how to break down a typical position, and repair positions Other titles by Sinclair: Volatility Trading Addresses the various concerns of the professional options trader Option trading will continue to be an important part of the financial landscape. This book will show you how to make the most of these profitable products, no matter what the market does.

No-Hype Options Trading : Myths, Realities, and Strategies That Really Work

Business & Economics

Author - Kerry W. Given
Publisher - John Wiley & Sons
Pages - 224
ISBN - 9780470947326


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Detail - A straightforward guide to successfully trading options Options provide traders and investors with a wide range of strategies to lock in profits, reduce risk, generate income, or speculate on market direction. However, they are complex instruments and can be difficult to master if misunderstood. No-Hype Options Trading offers the straight truth on how to trade the options market. In it, author Kerry Given provides realistic strategies to consistently generate income every month, while debunking many myths about options trading that tend to lead retail traders astray. Along the way, he makes a conscious effort to avoid complex strategies that are appropriate only for market makers or professional traders, and instead focuses on low-risk strategies that can be easily implemented and managed by a part-time trader. Shows how you can use option spreads in conjunction with stocks to produce a regular stream of income Each chapter includes exercises to help you master the material presented Examines how you can adjust option positions as market conditions change in order to maintain an optimal risk/reward profile Written for anyone interested in successfully trading options, this reliable resource cuts through the hype and misinformation that surrounds options trading and presents a realistic path to profits.

Option Spread Trading : A Comprehensive Guide to Strategies and Tactics

Business & Economics

Author - Russell Rhoads
Publisher - John Wiley & Sons
Pages - 273
ISBN - 0470618981


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Detail - A practical guide to unlocking the power of option spreads When dealing with option spreads your looking to purchase oneoption in conjunction with the sale of another option. If managedproperly, these spreads can provide experienced investors with thepotential for large returns without undertaking a great deal ofrisk. Option Spread Trading provides a comprehensive, yeteasy-to-understand explanation of option spreads, and shows you howto select the best spread strategy for any given market outlook.Along the way, author Russell Rhoads discusses spread strategiesthat can be used to profit from a strong up or down directionalmove in a stock, a stagnant market, or a highly volatile market. Healso details how you can harness the leverage of options to createa low-risk position that provides the potential for a bigprofit. All manner of spreads are covered, from calendar and horizontalspreads to vertical and diagonal spreads Highlights how you can monitor and adjust an existing spreadposition and provides tips on how to exit a spread trade Includes exercises and examples to test and reinforce yourknowledge of the concepts presented Option spread trading has become increasingly popular withactive traders and investors. Gain a better understanding of thispowerful approach with Option Spread Trading as yourguide.

An Option Greeks Primer : Building Intuition with Delta Hedging and Monte Carlo Simulation using Excel

Business & Economics

Author - Jawwad Farid
Publisher - Springer
Pages - 246
ISBN - 1137371676


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Detail - This book provides a hands-on, practical guide to understanding derivatives pricing. Aimed at the less quantitative practitioner, it provides a balanced account of options, Greeks and hedging techniques avoiding the complicated mathematics inherent to many texts, and with a focus on modelling, market practice and intuition.

FX Derivatives Trader School :

Business & Economics

Author - Giles Jewitt
Publisher - John Wiley & Sons
Pages - 624
ISBN - 1119096472


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Detail - An essential guide to real-world derivatives trading FX Derivatives Trader School is the definitive guide to the technical and practical knowledge required for successful foreign exchange derivatives trading. Accessible in style and comprehensive in coverage, the book guides the reader through both basic and advanced derivative pricing and risk management topics. The basics of financial markets and trading are covered, plus practical derivatives mathematics is introduced with reference to real-world trading and risk management. Derivative contracts are covered in detail from a trader's perspective using risk profiles and pricing under different derivative models. Analysis is approached generically to enable new products to be understood by breaking the risk into fundamental building blocks. To assist with learning, the book also contains Excel practicals which will deepen understanding and help build useful skills. The book covers of a wide variety of topics, including: Derivative exposures within risk management Volatility surface construction Implied volatility and correlation risk Practical tips for students on trading internships and junior traders Market analysis techniques FX derivatives trading requires mathematical aptitude, risk management skill, and the ability to work quickly and accurately under pressure. There is a tremendous gap between option pricing formulas and the knowledge required to be a successful derivatives trader. FX Derivatives Trader School is unique in bridging that gap.

An Introduction to Options Trading :

Business & Economics

Author - Frans de Weert
Publisher - John Wiley & Sons
Pages - 176
ISBN - 9781119994985


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Detail - Explaining the theory and practice of options from scratch, this book focuses on the practical side of options trading, and deals with hedging of options and how options traders earn money by doing so. Common terms in option theory are explained and readers are shown how they relate to profit. The book gives the necessary tools to deal with options in practice and it includes mathematical formulae to lift explanations from a superficial level. Throughout the book real-life examples will illustrate why investors use option structures to satisfy their needs.

The Market Taker's Edge: Insider Strategies from the Options Trading Floor :

Business & Economics

Author - Dan Passarelli
Publisher - McGraw Hill Professional
Pages - 256
ISBN - 0071754946


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Detail - TRADE OPTIONS LIKE A SEASONED PRO! A Trading-Floor Veteran Shares his Secrets "What I like about Dan's book is that it's obvious he isn't just telling you how to trade, he's telling you how he trades. There's always a big difference between those who teach trading from an academic standpoint and those who have traded and have the ability to walk investors step by step through the trade. For my money, I always seek advice and counsel from those that walk the walk and Dan Passarelli has walked the walk." Jon Najarian, cofounder Trademonster.com On Dan Passarelli’s first day as a clerk on the exchange floor, he spent the morning observing, practicing his hand signals, and running errands. Around midday, the veteran clerk he worked with said to him, “You’re up. I’m going to lunch.” Dan survived his trial by fire and went on to spend many years on the trading fl oor. He credits his success as a trader and educator to the hands-on experience he gained throughout his career. With The Market Taker’s Edge, Passarelli shares the knowledge and insights other floor traders keep tight to their chests—the knowledge you need to beat the market on a regular basis. This market maker turned market taker delivers a focused commentary on key concepts for operating in the options exchange like a pro. He offers a candid look at the ups and downs of his trading career and conveys the lessons he learned along the way in an informative and often entertaining way. After spending time on the floor in his shoes, you’ll understand: How professional traders attempt to make money—and why it’s different from the way you make money Why market makers are not the enemy How both market takers and market makers can profit while taking opposite sides of the same trade How to focus on what is important in a trade and avoid the noise Dan Passarelli has already taught thousands of people how to make a living as traders, and now with The Market Taker’s Edge, he can help you do it, too.

The Option Trader's Hedge Fund : A Business Framework for Trading Equity and Index Options

Business & Economics

Author - Dennis A. Chen, Mark Sebastian
Publisher - FT Press
Pages - 240
ISBN - 0132823411


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Detail - In this book, a hedge fund manager and an option trading coach show you how to earn steady, reliable income selling options by managing your option trades and running your option portfolio as a real business with consistent, steady returns. Packed with real-world examples, the authors show you how to manage your own “one man” hedge fund and make consistent profits from selling options by applying the basic framework and fundamental business model and principles of an “insurance company”. This framework helps you to apply your option trading strategy to a solid, predictable, business model with consistent returns. For someone who has some knowledge of trading options and wants to become a consistent income earner. The authors provide a complete “operations manual” for setting up your business. Gain pearls of wisdom from both a professional options trader and coach, and from a hedge fund manager focused on managing an options based portfolio.