From novice to riskarb...

Quote from marketsurfer:


woulda coulda shoulda was the MOST difficult trading book i have ever read, although it is miles away from what i am doing now with options, it is the BEST option book ever written.
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I have a similar feeling... I feel that Cottle is the stage of understanding I would love to ultimately achieve, and I am seeking the best route to build myself up so I can read Cottle and not find it tough-going...
 
Quote from Kicking:

Can you give an example of a trade "scalping gamma" ? And aren't gamma and delta plays the same thing in practice since gamma is just the amount by which delta increases for each point in the underlying?
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Yes, gamma scalping and delta-hedging are the same thing...
 
Quote from candletrader:

Hi riskarb,

Thanks for this... I was under the impression that Cottle was actually harder than Natenberg...

Assuming then, that they are both of equivalent difficulty, which book should be read prior to these two to make them more easily digestable?

For your information, I downloaded Cottle a year ago or so, and have skimmed Natenberg in a shop (a few years ago), but don't actually own it yet... Cottle is quiet heavy-going, although I recognise it's considerable value...
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I haven't read either in years, but that may be the case. They're certainly similar in difficulty.

McMillan, or the Williams book: Fundamentals of Options Market
by Michael Williams
 
Quote from riskarb:

I haven't read either in years, but that may be the case. They're certainly similar in difficulty.

McMillan, or the Williams book: Fundamentals of Options Market
by Michael Williams
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Cool! Thank you...

I will get McMillan (as opposed to Natenberg)... hopefully this will arm me to handle Cottle (or will it!?)
 
Quote from candletrader:

Hi Hello,

Which of McMillan (Options as a Strategic Investment) and Natenberg have you personally found
a) easier
b) more valuable for your knowledge-base
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That's a tough one. For the first few years I traded options I kept both as constant references. In fact, I still keep them handy. So I'd be hesitant to pick one over the other. However, Natenberg is more applicable to the style of trading that I have migrated towards.

But what I typically tell people first starting out with options is to begin with McMillan to get a firm grounding in the nuts and bolts of trading options and the various strategies, and then to move on to Natenberg to get a deeper understanding of the Greeks and volatility trading.
 
Quote from candletrader:

Cool! Thank you...

I will get McMillan (as opposed to Natenberg)... hopefully this will arm me to handle Cottle (or will it!?)
More...

Good idea, McMillan is sound and lighter than either Cotthle or Nate.

McMillan(or Hull)> Natenberg> Cottle> James> ... maths?

Anyway, all in due time. Get into a pattern of daily reading and you'll pound through this stuff in no-time at all.

riskarb
 
Quote from candletrader:

Cool! Thank you...

I will get McMillan (as opposed to Natenberg)... hopefully this will arm me to handle Cottle (or will it!?)
More...

Good idea, McMillan is sound and lighter than either Cottle or Nate.

McMillan(or Hull)> Natenberg> Cottle> James> ... maths?

Anyway, all in due time. Get into a pattern of daily reading and you'll pound through this stuff in no-time at all.

riskarb
 
the absolutely WORST trading book ever written is

'the complete option player" by trester.

this thick book came shrink wrapped at borders, peaking my curiosity---i took the bait and purchased it. stay away from this one !

surfer :)
 
Quote from candletrader:

Thank you both Hello_Dollars and riskarb for your advice, which is much appreciated...
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You're welcome, glad to help. Options math is algebraic until you get deeply into modeling/time series/stochastic process. Is it necessary to solve PDEs?(No). People always assume it's for maths-crowd. Natenberg and Cottle are sufficient to make a market.

The process can stop once you've got a sound understanding of the arbitrage. If you get into the maths, look into closed-form/StochVol models.

riskarb
 
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