Quote from cdcaveman:
what three books are you getting... i've read alot of options books.. and i'm looking for more to read.. i'm reading all of Augens books now .. i've read all of Talebs books.. Espen haug.. Mcmillian.. Allen Jan Baird.. James Bittman
Options Volatility and Pricing, Mcmillan on Options and The Option Traders Hedge Fund: A Business Framework for Trading Equity and Index Options. The last one seems a bit lightweight and their 'Insurance company' view seems a bit gimmicky but I am hoping to get something practical out of it, as opposed to the more theoretical / academic material that seems fairly typical in options.
Also awaiting the new edition of Options as a Strategic Investment out mid-August.
Later on will probably get Dynamic Hedging and Options Market Making.
James Bittman's book seems pretty practical oriented, is it good?
If you trade stock options you might want to check out The Option Trader Handbook: Strategies and Trade Adjustments by Jabbour. I gave it a miss because it is heavily stock oriented and I am interested in trading Futures Options.
I am on the lookout for any book that has decent coverage of Options Trade Management and Stops. Whatever I trade I always put in a huge amount of work into this area. While waiting for the books I simply started recording (for CL) daily call and put prices using 88.50 which was at the money on start day as the benchmark, taking each month from Sept to Feb 2013. I also record the $80 put and $95 call, ie roughly 10% OTM either way for Sept, Oct and Jan 2013. This just gives me a feel for how prices move in relation to the underlying, without using the greeks at all, just a pure price view. Straight off I am seeing that settlement prices (not even high/low) can move 40% to 50% in a day for the front month options, so typical day trading stops are out of the question. One has to take a longer term view and I think set stops based on n standard deviations move in the price of the underlying. That's just an early thought for further exploration, I know I will be putting hundreds of hours into stops and trade management as I move forward.
I never use anything straight from a book, but I am a book junkie because I find reading stimulates my thought process and I come up with really useful stuff as a result. My simple rule of thumb is if I come up with just 1 useful idea from reading a book, it is worth the money. That's why I have never written an Amazon book review as most folks there expect the universe between 2 covers for the price of a book.
