Options Math for Traders, + Website: How To Pick the Best Option Strategies for Your Market Outlook - Hardcover

Nations, Scott

Hardcover

ISBN 10: 1118164377 ISBN 13: 9781118164372

Publisher: Wiley, 2012

Synopsis

A practical guide to the math behind options and how that knowledge can improve your trading performance

No book on options can guarantee success, but if a trader understands and utilizes option math effectively, good things are going to happen. The idea behind Options Math for Traders + Website is to help retail option traders understand some of the basic tenants and enduring relationships of options, and option math, that professional and institutional traders rely on every day. This book skillfully highlights those strategies that are inherently superior from an option math point of view and explains what drives that superiority while also examining why some strategies are inherently inferior.

The material is explained without complex equations or technical jargon. The goal is to give you a solid conceptual foundation of options behavior so you can make more informed decisions when choosing an option strategy for your market outlook. Topics covered include the volatility premium, because over time, options will cost more than they are ultimately worth; skew, wherein far out of the money put options may seem cheap from an absolute term, but are very expensive in relative terms; and the acceleration in option price erosion. The book also has a companion Website, which includes links to those sites that can scan for the best strategies discussed in the book.

• Explains, in a non-technical manner, the mathematical properties of options so that traders can better select the right options strategy for their market outlook
• Companion Website contains timely tools that allow you to continue to learn in a hands-on fashion long after closing the book
• Written by top options expert Scott Nations

Most independent traders have an imperfect understanding of the math behind options pricing. With Options Math for Traders + Website as your guide, you'll gain valuable lessons in this area and discover how this information can improve your trading performance.

About this title

From the Inside Flap

OPTIONS MATH FOR TRADERS

Trading options is considerably different from the buying and selling of other financial instruments. And while no book on options can guarantee success, if you understand and use options math effectively, good things can happen. That's what Options Math for Traders + Website is all about.

Written by Scott Nations--President and CIO of NationsShares, a leading developer of domestic and international option-enhanced investment products--this practical guide takes the mystery out of the math behind options, making it both understandable and usable. It also provides you with a solid conceptual foundation of options behavior so you can make more informed decisions when choosing an option strategy for your market outlook. Ultimately, the goal is to familiarize you with the mathematical sophistication required for successful options trading.

Divided into three comprehensive parts, this reliable resource removes much of the guesswork from trading options, with comprehensive coverage of:

• The factors an options trader must consider when putting on a trade, including direction, magnitude, and time
• The quantifiable variables that can be used to determine an option's value and how option pricing models can offer insights as to what an option could be worth
• The what, why, and how much associated with the volatility risk premium
• The role of implied volatility in options trading and the various aspects of skew
• Time value and option price erosion
• Proven option strategies, including covered calls/overwrites, selling puts, buying calendar spreads, risk reversals, and vertical spreads

Each step of the way, Options Math for Traders + Website includes various examples of the strategies covered--illustrating how you can effectively incorporate them into your trading endeavors. It also contains informative "takeaway" sections at the end of each chapter that highlight essential issues you should be aware of when dealing with the specific topics discussed.

Most independent traders have an imperfect understanding of the math behind options. With Options Math for Traders + Website as your guide, you'll gain valuable lessons in this area and quickly discover how this information can improve your overall trading performance.

From the Back Cover

Praise for Options Math for Traders

"Just as he does every week on CNBC's Options Action, Scott helps everyone from a basic to advanced trader understand options in a clear, straightforward manner. Scott has the ability to transfer his immense knowledge of options in a way that is inviting rather than intimidating and can help traders select an options strategy to best reflect their thoughts on the market."
―JJ Kinahan, Chief Derivatives Strategist, TD Ameritrade

"Options trading for individual investors has come a long way from just simply 'going long' a call or a put. Understanding the basic mathematical principles behind options pricing, as well as basic strategies, will help build a solid foundation for the aspiring trader. Scott Nations combines those principles with real-world experience to create a winning combination."
―Kris Monaco, Head of New Product Development, International Securities Exchange LLC

"For anyone who finds options or the concepts of volatility challenging, Scott helps simplify them. Scott helps options traders of all backgrounds better understand these markets and trade more profitably."
―Michael Khouw, Managing Director, Head of Equity Derivatives, CRT Capital Group, LLC; CNBC contributor

Divided into three informative parts, Options Math for Traders + Website addresses some of the most essential issues of this discipline, from the volatility risk premium, skew, and the bid/ask spread to time value and decay, option pricing models, and implied volatility. Along the way, it also offers valuable guidance into using proven option strategies, including covered calls/overwrites, selling puts, buying calendar spreads, risk reversals, and vertical spreads.

Edition details

• Publisher: Wiley
• Publication date: 2012
• ISBN 10: 1118164377
• ISBN 13: 9781118164372
• Binding: Hardcover
• Language: English
• Edition number: 1
• Number of pages: 272