5 comments about Option Writing Strategies for Extraordinary Returns.

1. Basic options book with little new. Author doesn't give any proof of his successes and some of his examples have actually gone bankrupt. Its a book for beginners.



2. I have 15 years of experience with options trading. For the past 2 years I have invested in accordance with the strategies described in this book - and have benefited as much as the author did in his verified account statement published in the book.
   
   This book is not about options strategies. It is about investment strategies - very successful ones. It uses covered option writing of both puts and calls to generate a third source of income from common stock holdings. The strategies provide me with the opportunity to partially hedge my stock portfolio as a way of offsetting the extreme volatility that characterizes recent stock market trading. The third source of income - premium income from writing options - is a significant addition to the first two sources of income from common stock, dividend income and capital appreciation, both of which currently have special tax advantages.
   
   As an example,
   - On August 16, 2007, I bought 1,000 shares of TE at 15.01.
   - On the same day, I "sold to open" 10 TE Jan 2009 17.5 calls at 1.00.
   - On September 4, 2007, I "sold to open" 10 TE Jan 2009 15 puts at 1.25.
   
   The annual dividend from this NYSE-traded utility stock is 78 cents, or 19.5 cents per quarter. To calculate the return (not counting any price change) from the 3-legged position over the 17 months until option expiration, first add together five dividends of 19.5 cents, or 98 cents per share. Then add 1.00 from writing a call, and 1.25 from writing a put; that's a 3.23 return on a 15.01 investment - giving me 21.5% on my total investment over the 17-month period - which works out to be an annual rate of return of 15.1%.
   
   Of course, the options may be bought back, written up, or exercised before Jan. 2009, and the stock price may go up or down. In any case, the investment strategies described in this book serve me very well.
   
   The author of this book has put in place three "guidelines" that reduce risks associated with writing covered LEAPS.
   
   Guideline 1: On the upside, the investor is encouraged to write only that number of calls covered by the underlying shares of common stock (for example, 1,000 shares of stock allow the writing of ten covered call contracts).
   
   On the stock market downside, guidelines 2 and 3 are employed
   
   Guideline 2: Puts written should be 100% cash-collateralized so that funds are present to purchase any shares actually assigned.
   
   Guideline 3: A mental loss limit of 2% of a portfolio's value is recommended. A "portfolio" should have at least ten different holdings at any time. The portfolio's value is the sum of the values of the three legs for each of the ten or more investment positions. For example, if a portfolio value is $50,000, then any position (consisting of long stock, short puts, and short calls) that is down more than $1,000 should be closed and replaced with another position When any of my net positions are down more than the loss limit, I close the position and move sideways into a comparable stock. In this way, as stated in the book, I benefit from realizing a loss for tax purposes while maintaining the same (approximate) relative financial position.
   
   These investment strategies have helped me traverse the wide swings in the stock market while still earning an attractive yield.



3. I am an investor with 10 years of experience with writing options. I am very pleased with the conservative approach presented in this book.
   
   Of course there are other capital appreciation strategies and other income-generating strategies, but this book's strategy of the three-legged position (buy the stock, write the cash-collateralized put, and write the covered call) provides an excellent balance between risk and reward.
   
   The author stresses the importance of fully collateralizing the put, with either cash or near-cash investments such as tax-qualified preferred stock. Naked puts are never recommended. Writing covered calls and cash-collateralized puts are the key to safer long-term investing.
   
   The relevant comparison for me is how the three-legged strategy with fully collateralized puts and 100% covered calls (all LEAPS) compares with the standard investment strategy of either buying to hold a stock, or attempting to "time the market" by buying, selling, or selling short a given stock. I am convinced, through my experience with the three-legged strategy, that it is the best approach.
   
   The fact that an extremely large number of options expire worthless (about 85% of them) provides fertile field for the investment strategy of writing options for a third source of income. I can reap the rewards from the option expiration when it occurs, or, prior to expiration, I can re-write the option at a different strike price or different expiration date, or simply buy it back.
   
   I strongly recommend this book for long-term investors seeking additional investment tools with an acceptable risk level.



4. I am an option trader with 3 years of trading experience, and I am thoroughly alarmed after reading this book.
   
   Here are my criticisms:
   
   1. Lack of Clarity
   Two problems here: name, and explanation of the strategy. Mr Funk insists to call his recommended strategy "the three-legged position". OK, everyone is entitled to create their own pet names, but it would have been useful to tell the reader what the rest of the market calls this strategy - it is "Covered Strangle Writing" or "Covered Short Strangle".
   
   More serious than Mr Funk's refusal to come clean about the name of his recommended strategy, is his failure to explain the WHYs of this strategy. Now the common use of Covered Short Strangle is to generate income, and this is discussed at some length in the book. However, there is no discussion about the relative merits of this strategy compared to other income-generating option strategies, such as Covered Call.
   
   More dishearteningly, Mr Funk creates a twist in the standard Covered Short Strangle to devise a capital-appreciation strategy. Would a traditionally income-generating strategy be effective as a capital-appreciation strategy ? How does it compare to other capital-appreciation option strategies ? No discussion. Why does he recommend the sale of deep-in-the-money put options ? No explanation.
   
   In short, we get good clear details of the mechanics of his recommended strategy, but zero explanation as to WHY he recommends each part of this strategy.
   
   2. Fuzzy discussion of RISKS
   No where in this book can we find a risk chart that shows clearly at what price ranges will this strategy make or lose money, and by how much. You need to read the book very carefully to deduce (yes, deduce - because Mr Funk does not spell it out clearly) that it will make money when the stock price moves strongly upwards.
   
   Furthermore, Mr Funk only glancingly discuss risk management. What to do if the stock price moves down instead .. ? Well, don't forget to set your stop-loss at 20%. That is it. There isn't even any explanation whether the stop loss should be applied to all three positions (the stock, the short put and the short call options), or just the stock.
   
   So, the blurb in the front cover "Benefit from both up and down markets" is misleading. This strategy will hurt on the way down, and for the capital-appreciation variation (with deep in the money short put) it will hurt when the stock price is moving sideway too!!
   
   3. Zero discussion on the strategy's disadvantages
   Reading through this book, you will think that this strategy has no weakness at all. Let's refer to what other leading option experts have to say about it:
   
   "Very high risk and capped reward. Not recommended." (Guy Cohen, "The Bible of Options Strategies", 2005, p. 305) He goes on to say that while this strategy generates better yield compared to Covered Call, it is also substantially riskier, "the position can become loss-making at approximately double the speed as a simple Covered Call position" (p. 52).
   
   "So a covered strangle - which is a covered write and a naked put - is equivalent to selling two naked puts. Therefore, it would be more efficient to just sell two naked puts rather than bother with the covered strangle write." (Lawrence G. McMillan, "McMillan on Options", 2004, pp 76-77) He goes on to say that simply selling two naked puts will bring lower collateral requirements, lower commision costs and avoid having to deal with three bid-asked spreads.
   
   Every option strategy has a weakness; so this book's silence on this very important subject makes it a serious DANGER to your financial health.



5. I got interested in this book after seeing it listed as one of the "YEAR'S TOP INVESTMENT BOOKS" in the STOCK TRADER'S ALMANAC 2006. The description said that "conservative investors who are delighted to make 10% to 15% annually, year after year, should buy this book." I am a conservative investor with an objective in that range.
   
   Not only does the book give me step-by-step directions for achieving my goal, by writing puts and calls for the stocks I purchase, but also it provides the actual, verified results obtained by the book's author. That convinced me. I am now taking advantage of the three sources of income - capital gains, dividends, and option premium income - while feeling comfortable that I will benefit from my investments no matter what the stock market does. That's a good feeling for a conservative investor.

4 comments about Basic Option Volatility Strategies: Understanding Popular Pricing Models with Online Video Access.

1. Like all of the videos from Traders Library and Marketplace books, This is taped by amatures with chincy equipment in a noisey poor acoustic conference room at a Las Vegas hotel and the sound and visuals will show this. I highly recommend to avoid any and all of these products due to their inferior quality and poor production which shows in everyone made. These may just be all remakes from an unethical counterfit expert



2. I had bought one of the Authors other Volatility books and I thought Basic Option Volatility Strategies looked like a good book to compliment this other book I have.
   
   It came in the mail and the envelope loooked to small for this book I ordered, felt almost like the size of a DVD case?
   
   Opened it, Major disappointment, It is more like a quick guide and the online content is misleading as one other reviewer has pointed out.
   You can go online to view the videos and tests but you have to register with a website and give out all your personal info, (Name Address City state email etc. As Well 39.95 was alot to shell out for this content.
   
   A book without the online gimmick is what I wanted... I have since returned it



3. I bought this book with the understanding that I would also get the online video access, supplemental materials, and testing material using the website printed in the text. However it appears they have removed all of the online material and the website I was referred is used to SELL books and videos. I am shocked Sheldon Natenberg would be associated with such dishonesty. DON'T BUY THIS BOOK. This a pure bait and switch and on the verge of mail fraud. I give it one star since I cannot assign anything lower.



4. This is an amazing format. It has a video presentation and includes a complete course book based on the information. The video is online as well as self tests and charts. Imagine having Natenberg give a presentation and getting a guided tour with complete explanations of what he is discussing. A great place to start before reading his other works or follow up if you already have. I think it is an updated softcover version of the blue and white book.

5 comments about The Real Options Solution: Finding Total Value in a High-Risk World.

1. 
   
   The book is interesting and reads well. But it doesn't deliver up to the expectations for the following:
   
   - It is too basic. Most of the readers won't be able to use real options at all after reading
   - It is not so practical. Lacks the tools that the other book by Boer included
   
   Overall, is an interesting read to get familiar with the kind of situation where real options are of use and increase your culture on the matter, but it is not a practical "solution"



2. This book attempts to expose the reader in a nontechnical manner to the new technique of evaluating investments in the New Economy characterised by volatility and uncertainty.The author does so without resorting to mathematical methods.The book is basically expository and attempts to build upon the readers'familiarity with financial options.It concentrates in describing the real options which each business decision is confronted with and demonstrates the flexibility which managers face. He views these opportunities as options even the decision not to implement the plan. This is a creative approach to understanding what real options is all about.



3. This book was a real revelation to me. The real options approach to valuation is a very valuable new tool, and this book explains how it works in clear terms. Perhaps more important is the extensive, thoughtful and provocative discussion throughout the book of risk and innovation, how to think understand them, and how to frame and manage the full process of value creation in business. This book is cutting edge, but any decision maker or investor in innovative business enterprises should definitely read it.



4. I would like to congratulate Dr. Boer on his success with making "real options" real for the practitioners. I have read many, if not most, most of the books out there on this topic, and found none to be as accessible and fun to read as Dr. Boer's treatment of this subject.

   I have also bought his other book, The Valuation of Technology - Business and Financial Issues in R&D. Again, full of practical insights that are not available elsewhere.

   I fail to understand the scathing review of the reader from Norway. Was this person expecting to learn about financial options, instead of real options, from this book? In that case, it was the reader's mistake for picking the wrong book! For real options, this book has no peer. I would recommend it to anyone who wants to apply the real options theory to real-world problems.

   Thanks Dr. Boer for a job well done and for making a real contribution to realistic valuation and pricing of business opportunities.




5. Before reading the book I had spent only 15 minutes reading an article in a business magazine about real options. In those 15 minutes I learnt more about real options than after reading 280 pages in Dr. Boer's book.

   I am just amazed about the other ratings below - these people must just be from another planet?!!

   Do yourself a favour and do not buy this book (if your intent is to learn anything useful about real options). This is actually the first book I have ever thrown into the garbage bin (honestly).

1 comments about Advanced Options Trading: The Analysis and Evaluation of Trading Strategies Hedging Tactics and Pricing Models.

1. Mr. Daigler's work, Advanced Options Trading, provides a sound overview of option pricing models and the variables that influence pricing for stocks, futures, and exotics. The model of focus is Black-Scholes, though I give Mr. Daigler credit for a renewed look at works by Cox, Rubenstein, and Ross. In addition to the sometimes-tedious theoretics of options, Daigler examines hedging techniques and arbitrage. Overall, a rigid yet unimaginative examination of derivatives, nothing surprising just reaffirming. Floor trading and market makers may find its presentation a pleasant refresher, otherwise look to McMillian or Sheldon Natenburg's works.

1 comments about Option Spreads Made Easy Course Book with DVD (Trade Secrets Course Books).

1. Like all of the videos from Traders Library and Marketplace books, This is taped by amatures with chincy equipment in a noisey poor acoustic conference room at a Las Vegas hotel and the sound and visuals will show this. I highly recommend to avoid any and all of these products due to their inferior quality and poor production which shows in everyone made. These may just be all remakes from an unethical counterfit expert

5 comments about Real Options: A Practitioner's Guide.

1. Be warned! This is a "partial" work.
   Mr. Copeland's work is great and insightful (once you download 26 pages of errata and keep it close by). He starts off with NPV and builds up to "rainbow" options. The detail is comprehensive and the chapter end questions are challenging. And this is my beef. You have to pay The Monitor Group an additional $US 30.00 for the solutions to the problems. This is not what I would call "a parishioners guide" but another example of an American corporate rip-off!.

   Due to the fact that the errata was the longest I have come across, that the editing was generally so poor, and the solutions are an additional charge, I feel that Texere owes me a complete parishioners guide to real options. By using Real option analysis or NPV, the additional costs in time and money can not justify an investment in this book. A real sunk cost for me.

   Mr. Copeland, do not let your name go on such a poorly finished product again.




2. Is there a list available with all the errors in the book? Does anyone know where to get it?



3. Content : A
   The book enables the reader to understand the world of real options without having to take a course on stochastic calculus, which is good because otherwise Real Options would be too hard to sell to management. The book is rich on examples and presents the building blocks of almost every combination imaginable. More case studies though would have been a big plus.

   Presentation : F
   You absolutely should not read the book without first [knowing] the corrections.... There are so many errors everywhere - in formulas, calculations and text (a total of 177 for 350 pages of relevant content !!) - that I could only shake my head in disbelief. Quite obviously, nobody has made even a half-baked attempt to proof-read the book.




4. Accessible to practitioners but occasionally superficial with some flaws in structure and content real options.



5. The phrase, "stochastic differential equations" may not trip off your tongue and you may not initially see the joy of learning that replicating portfolio value = mV + B. Yet Tom Copeland and Vladimir Antikarov guarantee that their book is a practical, everyman's guide to the sometimes serious math world of Real Options Analysis (ROA). Thanks to the availability of personal computers and modeling software, everyone can now use ROA. Before PCs, only doctoral students of finance or economics would have been safe attempting it. Sure, ROA is harder than the traditional valuation methods or Net Present Value (NPV), but real options allow you to understand the full value of an asset by taking into account the factors of flexibility, risk and uncertainty. Company case models, the theory behind ROA and equations are all showcased in the book. This can be a challenging text, but we from getAbstract strongly recommend it to all CFOs and anyone charged with evaluating business strategies.

4 comments about The 100% Return Options Trading Strategy.

1. On p. 96-104 the author attempts to give spreadsheet formulas to compute stochastics, Welles Wilder RSI, and two other indicators he recommends. The formulas are outright wrong for the Stochastics %K-%D signal. Had someone proofread or even tried to recreate these in Excel, it would be blatantly obvious they are wrong. Upon contacting the author at his email address, he suggested that I pay him to receive the full version of the spreadsheet for several hundred dollars, rather than giving me the correction to the wrong information in his book. Also, on p. 78, the computations of the "safe" strike prices are based on erroneous data. I compared historic data from the time frame he references and it looks like he omitted data from August 1996 and just relabeled all of the rows so that the data from Nov-94 through Aug-96 is actually for Dec-94 through Jul-96. The Mar-97 MAX data appears suspect, being 10.33 rather than 10.25. The Aug-97 data for MAX and MIN appears suspect, being 43.63 and 1.59, rather than 42.72 and 26.50, respectively. It also appears that he is using the wrong standard deviation function to compute sigma. You can't duplicate his numbers in the C2sig13 and P2sig13 columns with the data he provided in the table in Figure 5.1.

   His latest newsletter shows that the "safe" strike price for the February 2000 short puts was 720, but if you followed the instructions in his book, you would have sold the Feb 745 puts short and been out 22 points per contract on naked puts, or you would have lost your entire spread when the market dumped from 752.19 to 728.52 on options expiration Friday in February. His system for mitigating losses would not have worked either because when the market broached 745 that day, you would have paid about 6 points to close out a losing spread that you may only have received 1-2 points to open. These spreads he advocates are based on some very fast and loose statistical claims and not very thoroughly explained at all. Very dangerous!




2. I found this book valuable in the development of my options trading strategy. I do not follow it to the letter but I think it provides great food for thought. It's not great, it's not perfect, but it's not horrible either for someone looking for ways to trade. Dr. Schiller has answered my e-mails to him every time I had a question. In summary, I believe there are better ways to trade credit spreads but I probably wouldn't be doing it at all were it not for this book.



3. Mr. Schiller has a PhD, but his book does not reflect much quality control went into its composition. There are missing figures, but yet referenced in the text. The book lacks an index. Several words are abbreviated, but there is no apparent explanation for them. I get the feeling this book went from first draft directly to publication. The hefty price is not justified. I am glad I only borrowed it from a library. The one purpose of the book seems to be to promote Excel spreadsheets he has created to track the OEX; and their prices are equally inflated. Why must you, Mr. Schiller, sell them from Spain? Isn't trading the OEX sufficiently profitable by itself?



4. Non-conventional terminology. Worst book, on options, I've ever read

5 comments about Option Strategies for Directionless Markets: Trading with Butterflies, Iron Butterflies, and Condors (Bloomberg Financial).

1. I'm usually pretty open to reviewing books. Sometimes I get books that I can't do justice to in reviewing. The following two books may be examples of that:
   
   Option Spread Strategies: Trading Up, Down, and Sideways Markets
   
   Option Strategies for Directionless Markets: Trading with Butterflies, Iron Butterflies, and Condors
   
   I'm not an options trader. Do I understand the math? Largely, yes. Do I understand how they can benefit investors? Also yes. I occasionally use options to enhance income, but for the most part, I avoid using them for personality reasons. I fear that I would make bad decisions while working at a higher level of leverage. I don't trust myself.
   
   As for the books, they are clear and well-written, giving both the common view of options, and the view using the "greeks" a la Black-Scholes. The chapters explain, and then offer tests at the end to see how well you have understood. These could be textbooks in a business school.
   
   The books explain how you can make money in any environment if your view of the world is correct. That's the catch, though. Few of us get it right within the length of time before an option expires. Be wary of the correctness of your opinions.
   
   Now, my opinion is not of the highest value here. Better to consult Adam Warner or Bill Luby, who have far more practical experience on a retail level. My experience is largely institutional with respect to options.



2. this book did very little for me. already knowing the basics, i was looking for something more, but this book didnt deliver. dont bother.



3. Before I purchased this book, I was looking for a text that would allow me to perfrom options trading in a practical manner i.e I was looking for clear description in what to look for prior to setting up trades, how to define the probability of stocks / indices hitting my target, entrance strategies, exit stratagies, rescue scenarios and soild money mangement techniques. I was also looking for examples of "real" trades that were performed. When I got the book my first impression was that it looked like and read like a school mathematics text book. There were lots of information but not much that could help me practically. The diagrams in the book are well drawn, but again they look like school book text with lots of theory. I do not think having questions at the end of every chapter were really that useful. However the chapters were well written and did provide some useful information for the novice option tarder
   
   I think a better approach would have been to focus on three or four strategies and provide text showing how to apply these to trades starting from what to look for, probability set up, entrance and money management. Also it would have been useful to provide a chapter on how to get started, dealing with things such as virtual trading, potential brokers, charting etc.



4. Long Iron Condor is defined in conventional wisdom as Bull Put Spread and Bear Call Spread with a gap in between. (Wikipedia)
   However, this book is relabeling it as Long Iron Pterodactyl.
   Furthermore, this book redefines Long Iron Condor as a series of Calls with 4 different strike prices with no gap in between.
   How confusing is it!
   It appears that the author is trying to reinvent the strategy and giving them different names.
   
   On the positive side, this book is being laid out as a workbook with quizzes and answer keys, have graphs and explanation how the greeks affect the strategies.
   Had the author have the strategy definitions straight, it would be a worthwhile book to read.
   
   Highly NOT recommended for beginners, and only worth a little glance for advanced traders.



5. After having learned much from Saliba's first book on options, I was disappointed that there wasn't much new here for experienced options traders. Those contemplating these types of directionless strategies should not forget that they will likely experience long strings of small winners puncuated by infrequent huge losses that can wipe them out.

No comments about Futures, Options, and Swaps - Textbook Only.

3 comments about Trading Optures and Futions.

1. Joe Ross has created one of the best "real world" trading books that I have ever read. This book is extremely thorough in how it discusses options and futures trading. It explains in detail:
   
   o How to identify a trading opportunity
   o When and how to initiate a trade
   o How to adjust a position if it gets into trouble
   
   Joe Ross also has some very wise comments about what it takes to be a trader in the market and what you need to be prepared for. The only bad thing about the book is that the cost is awfully high. I was lucky enough to find a very low cost used version.
   
   In any event, if you elect to buy the "full list" version, you will not be disappointed. Good reading and profitable trading.



2. This is the only trading book you need in your library. If I was going to do it all over again as a trader I would buy this book and Mark Douglas' The Disciplined Trader. Better than most of the seminars being touted today and in my opinion better than software that predicts with almost XX% accuracy for 50 times the cost of this book. I have all of Joe Ross's books and this is by far the best one.



3. Joe Ross has written the best strategy guide for trading options I have ever seen. This book shows you how to blend the best features of option trading together with the best of futures trading. The book is a classic, and with each reading, I gained more and more understanding of how the markets really work, and how to take advantage of combining options and futures.

   If you are an option trader, you need the understanding of the underlying futures as presented by Joe. If you are a futures trader, Joe shows you the simple and most straightforward way to bolster your futures trading by adding to it the world of options.

   To say that this book is outstanding is to vastly underrate its contents. A bargain at any price and worth far more than its cost.