From novice to riskarb...

[candletrader]

From reading the contents pages of Natenberg and McMillan on Amazon, it seems like McMillan runs through the strategies without incorporating the Greeks but that Natenberg first covers the Greeks...

Would you say, therefore, that Natenberg takes a more holistic approach to the strategies and is possibly of more value?

Or do you feel that the in-depth approach to strategies that McMillan uses is a better starting point?

 

[riskarb]

Quote from candletrader:

From reading the contents pages of Natenberg and McMillan on Amazon, it seems like McMillan runs through the strategies without incorporating the Greeks but that Natenberg first covers the Greeks...

Would you say, therefore, that Natenberg takes a more holistic approach to the strategies and is possibly of more value?

Or do you feel that the in-depth approach to strategies that McMillan uses is a better starting point?

Yes, absolutely. McM is a decent primer, but you'll buy Natenberg eventually.

 

[riskarb]

Quote from marketsurfer:

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

Too funny, that "shrink wrap" ploy is a great marketing gimmick. Trester did write a neat little option app for the Apple Newton handheld.

riskarb

 

[Maverick74]

I'm very surprised that no one has mentioned "Option Market Making" by Jan Allen Baird. Of all the books I have read on options, and I have read them all, this is by far the best. But read it after you read Cottle and Natenburg.

And on a side note, all the authors of these books are very very bad traders. I have met many of them. Its not the semantics that you need to learn, if you are not a good trader overall, reading all the books in the world and understanding all of the nuances of the greeks won't make you a dime. That's why a lot of these guys stay in academia and never wander into the real world.

So read the books, take them with a grain of salt and add as much experience as humanly possible. And most important of all, create your own path. Don't follow the ideas in these books but rather use these ideas to create your own. All of these books will do is allow you to carry on a conversation in a bar over options, none of them will put money in your pocket. That's my two cents.

And candle, I suggest you PM metooxx as well. He has more experience trading options then everyone on this board combined. He also might be able to give you some great insights. Good luck.

 

[riskarb]

Quote from Maverick74:

I'm very surprised that no one has mentioned "Option Market Making" by Jan Allen Baird. Of all the books I have read on options, and I have read them all, this is by far the best. But read it after you read Cottle and Natenburg.

LOL, I thought Baird too specific.

 

[barsik]

Does anyone know any good books on interest-rate option models (looking for
a mathematical text describing different models,
and not for a book geared towards trading).
Thanks.

 

[Hello_Dollars]

Quote from Maverick74:

I'm very surprised that no one has mentioned "Option Market Making" by Jan Allen Baird. Of all the books I have read on options, and I have read them all, this is by far the best. But read it after you read Cottle and Natenburg.

And on a side note, all the authors of these books are very very bad traders. I have met many of them. Its not the semantics that you need to learn, if you are not a good trader overall, reading all the books in the world and understanding all of the nuances of the greeks won't make you a dime. That's why a lot of these guys stay in academia and never wander into the real world.

So read the books, take them with a grain of salt and add as much experience as humanly possible. And most important of all, create your own path. Don't follow the ideas in these books but rather use these ideas to create your own. All of these books will do is allow you to carry on a conversation in a bar over options, none of them will put money in your pocket. That's my two cents.

And candle, I suggest you PM metooxx as well. He has more experience trading options then everyone on this board combined. He also might be able to give you some great insights. Good luck.

Great point, Mav. Developing an approach with which you are comfortable and fits your particular trading personality is critical. Were it otherwise, the actual cost of tuition in the options markets wouldn't be so damn expensive.

 

[riskarb]

Quote from barsik:

Does anyone know any good books on interest-rate option models (looking for
a mathematical text describing different models,
and not for a book geared towards trading).
Thanks.

Jarrow's "Modelling Fixed Income Securities and Interest Rate Options"

 

[barsik]

Quote from riskarb:

Jarrow's "Modelling Fixed Income Securities and Interest Rate Options"

Thanks Arb!

 

[Maverick74]

I'll post some useful links here. If you really want to get serious, and I'm not talking sunday afternoon reading, but if you really want to delve into the semantics, check out this website and start ordering some of these books. If it's worth reading, it's on this site.

http://finmath.com/

If you want a serious message board for option traders, check out this place.

http://www.wilmott.com/

Go here to Taleb's home page. He has some interesting essays on risk and other related topics.

http://www.fooledbyrandomness.org/

This is a great website for the derivative mind. All that is going on in the world of derivatives.

http://www.riskwaters.com/risk/


This website is a great place to freshen up on your statistics knowledge.

http://www.statsoft.com/textbook/stathome.html

And welcome to the world of probabilities.

http://www.probability.net/

Enjoy!