Need an advanced options book
- Thread starter eldorado1
- Start date
One of the key mistakes of all beginning options traders is that you trade very specific types of positions. No, you have to think of relative value in terms of risks and then compose a position that matches that risk profile. If you like selling ATM gamma (convexity) and protecting yourself with OTM options (because you believe vol will change should the underlying security break out of the range), you trade a butterfly or a spread. If you think that you can sell gamma and protect yourself with vega, you trade a calendar. And so on. Learning what a gutted iron fly is or that a 1x2 is also called a slingshot has very little to do with successfully trading volatility.
I have read the bible of options strategies a couple of years ago and as erol said it's not the type of book I would find useful at this time. I would like mention it's a cool book but its very reserved and lacks (for me) the writer's/trader's personal touch + Guy Cohen doesn't mention important strategies like double calendars and double diagonals. Those are the trades I look for.
Option trading and the hidden reality must be cool and thanks Carl for the links you attached but it's not for me. erol's comment that it's a book for someone with big pockets helped me reach that conclusion ( just buying it requires a deep pocket or two).
As for "volatility trading" I understand it's about trading straddles. I don't trade pure straddles but perhaps I could improve my back month׳s adjustments.
"trading options greeks״ - I would like to believe I know my Greeks. Howard, I am sure you know them better then me. Is the book's name deceiving? Sounds too formal + it must be including a lots of basics.
Option trading and the hidden reality must be cool and thanks Carl for the links you attached but it's not for me. erol's comment that it's a book for someone with big pockets helped me reach that conclusion ( just buying it requires a deep pocket or two).
As for "volatility trading" I understand it's about trading straddles. I don't trade pure straddles but perhaps I could improve my back month׳s adjustments.
"trading options greeks״ - I would like to believe I know my Greeks. Howard, I am sure you know them better then me. Is the book's name deceiving? Sounds too formal + it must be including a lots of basics.
No, volatility trading is about trading volatility, which is profiting from mis-pricing of implied vol. Trading strangles, condors, anything where you remove the directional component is pretty much about volatility trading.
I did mean risks, not greeks. The book is fairly basic if you have been running a vol arb fund for years (like Euan does), but there is a lot of food for thought there.
My view is that Sinclair's book is one of only a handful of books outside of proprietary monographs that lend an academic slant to option trading. It is not a practical, "how to" book, although I can see how one might get that impression. To Sinclair's credit, he didn't make the citations encyclopedic, and he didn't turn the text into a quant treatise. I guess it's best described as "food for thought."