“Option Volatility & Pricing” but what’s next!

F

FT79

After reading Option Volatility & Pricing of Natenberg (great book btw) I want my knowledge level brought to the next level. Does anyone knows a good book??

I’m especially interested in books about selling premium and managing (adjusting) your position when the underlying moves. I ‘m looking for a book that I can use in real life and not a book simply explaining the strategies. (perhaps with MS excelsheets examples where I can calculate the Delta, Gamma, etc)

I’m thinking of buying “Options, Futures and other derivatives, 6th Edition” of John C. Hull.

Thanks,
FT79
 
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The Option Trader Handbook : Strategies and Trade Adjustments
by George Jabbour & Phillip Budwick

AKA Optioncoach

http://elitetrader.com/bo/index.cfm?action=view&B_ID=102&CatID=4
 
try and get hold of Charles Cottles' books, in particular "Options.... the hidden reality" it incorporates his earlier book "coulda, woulda, shoulda" and is well worth the price... It covers adjustments and synthetics in a simple to understand way, with piles of practical examples.

Optioncoaches' book "the option traders handbook" covers adjustments pretty extensively, though it concentrates on equity options.... but again worth it.

A couple of others.... and I picked these up after I saw them recommended by the folks on here.

"Option Market Making" by Allen Baird
&
"The Business of Options" by Martin O'Connell (explores currency options)
 
Quote from FT79:


I’m thinking of buying “Options, Futures and other derivatives, 6th Edition” of John C. Hull.
More...

Worth having but not as per your current requirements. It is more of an academic text.
 
Quote from FT79:



I�m thinking of buying �Options, Futures and other derivatives, 6th Edition� of John C. Hull.
More...

This isn't what you need.
 
FT79,

Hull's is an excellent book.

A deep understanding of options cannot be avoided without reference to "academic" texts. The basics are fine but dangerous if one considers these the totality of options.

Examination of the greeks in Hull provides an explanation of their nature - as measurements of exposure, for example - and behaviour. Knowing this enables anticipation of reaction to an adverse move.

Knowledge of risk beforehand - identify and quantify - avoids a bad position, substituted with an alternative.

A knowledge of car mechanics may not make you a better driver, but you will know the limitations and weaknesses of your car.

You should go as far as your intellectual abilities take you – and then more (as mentioned elsewhere, look for Derman on Google.)

Grant.
 
Quote from rosy2:

open an account and see how things work in reality
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I already done that :D

And already trading but I want better insight in all the variables when trading options. I know models have there limitation but it will give you great insight how MM or other participations value options.

A totally agree with Grant on this matter, knowledge about options will not make me a better option trader, but I will know the limitations and weaknesses of particular models, trading strategies, etc.

that's why I asked this question on ET. I'm looking for a book that will give me better insight in trading (index)options but are written by somebody with experience in trading them also. That's why I love the book of Natenberg.
 
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