Trading Options in Turbulent Markets: Master Uncertainty through Active Volatility Management

A thoughtful presentation of options trading and pricing which discusses the impact of volatility in the process

Trading Options in Turbulent Markets reveals how volatility in options trading relates to today's stormy marketplace and shows you how to manage risk and take advantage of market volatility when investing in derivatives. In this book, options expert Larry Shover skillfully addresses how to use historical volatility to predict future volatility for a security, or the implied volatility, and offers suggestions for dealing with that odd feature of options trading known as skew.

Trading Options in Turbulent Markets also looks at specific options trading strategies that help you offset risk and reach for profit. These include the covered call, the naked and the married puts, collars, straddles, vertical spreads, calendar spreads, butterflies, condors, and more.

• Contains proven tools for evaluating options trading decisions, including the greeks: delta, vega, theta, and gamma
• Outlines effective strategies for trading options contracts in uncertain times
• Offers insights on the risk/reward situations all traders in this field face

Filled with in-depth insights and practical advice, this important resource explores how to turn turbulent markets into profitable opportunities, and discusses why options are the best tool to use in such a difficult endeavor.

From the Author: Six Things You Need to Know About Option Volatility

1. Option volatility is the direct result of an inefficient marketplace. It’s the collective product of people's fear, irrationality, and outlook on the market.

2. Option volatility is persistent in nature. Periods of low or high volatility tend to remain for far-reaching and extended amounts of time.

3. A sudden change in option volatility can quickly alter your emotions. It can trigger fright and dull the brains ability to make wise decisions.

4. Baseball has a saying, “The ball will always find you.” Option trading has a similar saying, “Option volatility will eventually find you.” Volatility will inevitably strike you when you are least prepared.

5. Option volatility is a great unknown. No matter what is said, modeled, or written about it, volatility simply cannot be forecasted.

6. Option volatility amounts to risk – and that risk is derived from the notion of randomness that surrounds us.

Larry Shover has been a firm and proprietary options trader for more than twenty-five years and has had the opportunity to give speeches and teach courses at a variety of exchanges including the Chicago Mercantile Exchange (CME) for more than twenty years. A large part of his career has been dedicated to developing his own proprietary trading firm, and he has also served as director of education, senior vice president of trading, and director of global trader development at several commodities and options firms. Shover is a member of the CME and the Chicago Board Options Exchange (CBOE) and holds several Financial Industry Regulatory Authority (FINRA) licenses.

LARRY SHOVER has been a firm and proprietary options trader for more than twenty-five years and has had the opportunity to give speeches and teach courses at a variety of exchanges including the Chicago Mercantile Exchange (CME) for more than twenty years. A large part of his career has been dedicated to developing his own proprietary trading firm, and he has also served as director of education, senior vice president of trading, and director of global trader development at several commodities and options firms. Shover is a member of the CME and the Chicago Board Options Exchange (CBOE) and holds several Financial Industry Regulatory Authority (FINRA) licenses.