5 comments about The Volatility Course.

1. Like The Options Course by the same author this is a very detailed publication with lots of examples. However it does become a bit heavh going the further you get into it.
   
   The message early on is worth the read but with the amount of detail in some of the examples one does tend to lose interest.



2. If you have done the optionetics course or read the Options Course then you will love this book. It only covers a few chapters on Volatility, which I would have liked there to be more, however, there were a number of chapters on practical ways to trade it. I particularly liked some of the indicators to trade volatility such as bollinger bands and ATR. Overall a good read and a clear, understandable approach to help improve you as an options trader. Its probably worth a second read, as its full of a lot of great information.



3. The book was too basic and gives novices enough information to hurt themselves in the real market.



4. This book is the perfect compliment to The Volatility Course by George Fontanills. It uses real case studies and guides you through step-by-step just like the main book. It tests your knowledge learned from the main coursebook. As with any new subject, learning options takes time and this book really helps the time you spend feel more productive.



5. This was a fantastic book and gave me much needed insight into the world of volatility. Thanks!

5 comments about Put Options : How to Use This Powerful Financial Tool for Profit & Protection.

1. This book does an excellent job at explaining Put Options and why you need to use them. You'll never just buy a stock again, selling the Put Option is ALWAYS a smarter move.



2. The author has an interesting thesis for investing solely using a hedged set of Put options. After doing some analysis it does appear that the concept has merit, at least during times of high market volatility. At other times it appears that the premiums do not exceed the trade commisions -- at least with my brokerage.
   
   The author must have had a minimum word requirement in his publishing contract because he took an inordinate amount of space to define his reasonably simple concept.



3. One-third of the book is an advertising of a strategy. Or maybe it just sounds like an infomercial?
   
   One-fifth of the book is tables of almost all stocks and almost all options. Why?
   
   And, as mentioned before, where is that tool that helps in calculating the selection parameters? It is actually one of the most ridiculous (and negative)points of the book. Here: "You are probably thinking that you could spend every waking hour doing this analysis. Fortunately, you do not have to. The automated toolkit I developed will allow most investors to properly analyze...portfolio in less than 30 minutes". Right. Good. Where is it?
   
   As I said, the book is on a silly side as it tries to explain the strategy to ones who do not know what an option is.
   
   The strategy and ideas (diversification, unpredictability of stock prices, the notion that the strategy does not guarantee gains all the time, factors to consider, etc.)in this book are not bad.



4. I found this to be a very good discussion of a strategy that I was already considering - Selling PUT options. The author makes a compelling argument for this approach and adds some additional twists to the idea that I had not considered. If you have a reasonable amount of capital to start working with, probably 20K+, you could implement this type of strategy with good results. Less capital than that and you will probably start to see the effects of brokerage fees eating up too much of you profits if you try to diversify.
   
   Overall, a very good book - the one downside is that in the book the author keeps mentioning a software program he had written to help you implement the system, but after much searching, including on his website, I was not able to find it. Too bad, it sounded like a very helpful program.



5. You should know I'm biased. Mr. Cohen is my personal financial consultant. Over the past three years while many of my friends were losing a fortune in the market, my portfolio grew substantially thanks to the principles discussed in this book. If you can't have Jeff as your personal advisor, the next best thing to do is read his book and see how he does it. - Wm.G.Hayden,M.D.

5 comments about Design, Testing, and Optimization of Trading Systems.

1. The book is really well written. Not a single line of code, just the concepts and math required to bullet proof your trade system programming.



2. The book is well written and easy to read. I have learned a great deal from it. So far, it is the best book I've read about trading system design and development. I recommend it to anybody who is serious about trading systems.



3. Let me state my biases up front. I've always been rather suspicious of so-called "mechanical" trading strategies, although I'm a strong supporter of a technical approach to the market.
   
   Technical analysis, for me, has always been about individual market participants, as a group, are likely to respond to price action to further their interest for profits, or to conserve capital. Market players are not mindless robots who are as predictable as coin flips, but people pursuing goals, and who learn from history. How the market reacts to news and fundamental info is extremely important from this point of view.
   
   While there are things that can be learned from looking at price action, any algorithm that can extract profits from markets is likely to be short lived. With the advent of cheap, powerful computers, it is all too easy to "test" a system on historical data, only to have it fail in real time. Proper system testing is difficult to do.
   
   Even if testing is done properly, it is likely to have been found by a significant number of smart, well-capitalized people long before you or I ever came onto the scene, making historical test results misleading, possibly unprofitable.
   
   The fact is, markets change, and the context of price action in the past may be totally different to the current market environment. How do market systems account for market change, while still producing valid results?
   
   This book allayed some of my fears. Since system testing IS hard to do, it is unlikely that a significant percentage of people will discover the signals of a profitable system, making the method unprofitable.
   
   Even a skeptic such as myself will admit that proper historical testing can, at the very least, encourage thought about future market conditions, and prepare for various scenarios.
   
   Most important (to me), system testing provides a reasonable method for adapting to changing markets. As new data comes in, the model can, and should, change.
   
   This book teaches you how to do proper system testing, so you can have confidence in your results.
   
   I deduct 1 star from the emphasis on the use of a frequentist statistical methodology. It is becoming clear in economics that talk of "long run frequencies" makes little sense for historical events that occur in a particular place, or a particular time, and are not likely to be repeated.
   
   The use of Bayesian methods based on a subjective interpretation of probability (ie. degrees of belief), are growing in usage, and can provide more appropriate answers to certain questions that the "frequentist" methods do not.
   
   For experienced technicians, I can recommend it.



4. Very well written (simple English) that help to organize thoughts of trading. and it help to improve your level of thinking about trading in general. little book, but very useful. It is very good start to learn how to make a mechanical trading system based on the ideas (that you think should work in the market) then you can back test and forward test those ideas. in this way you will see the weakness and the strength of your way of approaching the market. that will lead to one or more step ahead on you journey to achieve your goals in trading. it is simple and makes you do this tough task with the least possible amount of time.



5. I have never written a comment about a book, but hopefully other people will at least be warned. This is the one of the worst books I've ever read. I have read several Wiley books; most of them are poorly written and lacking substance. This one is unbelievably bad.
   This book deserves a negative five stars. (Who wrote those other reviews?)
   If you have never read a book on trading systems, then this book is may tell you something. Otherwise, save your money. There's nothing here.

5 comments about The Options Course Workbook: Step-by-Step Exercises and Tests to Help You Master the Options Course (Wiley Trading).

1. I bought the workbook in conjunction with The Options Course and it helped my trading so much! The workbook lets you practice the information you're learning in the course book with quizzes and summaries. I definately recommend that you buy the workbook as well as The Options Course book.



2. This book contains 90 pages of (mostly) multiple choice questions with the answers at the back of the book. It is the type of material that routinely follows a chapter in any textbook. Though the questions are to the point, my objection is that it is published as a separate book at the price of many complete works. Properly published, these questions would not add 90 pages to the original text which was itself under 300 pages. The questions did not help me understand the material, only tested my recollection. I feel that publishing this material as a workbook is only a marketing ploy and cheapens the product.



3. I have bought this book and the Options Course Book. This book is designed to directly relate to the hardback book (Options Course Book) and has no application to be read on its own.

   The author has used the workbook to test your knowledge of the hard back book. The work book pulls the salient points out so that you ensure you got what you need.

   The tests are accompanied by the answers at the back of the book. I thought it a great idea to combine the two books as I never know if I got it all when I read a book.

   This book has no practical use on its own and should have been bought with the Course Book.

   Great idea. However, if you are looking for the detail you should buy the Options Course Book.




4. If you're looking to read and assimilate information about options and then test yourself on the information just acquired - this is the exact wrong book!

   This book contains only questions and multiple choice answers. The answers are in the back. The learning method is to take the tests blindly and then see how many you guessed correctly. It is learning in reverse.

   I was hoping for an explanation of a term or concept and then a follow up test. There are only tests. As such it may live up to the letter of its title but it fails miserably as a teaching tool. For what it purports to be and for what it delivers it seems ridiculously overpriced.

   A very unsatisfied customer.




5. I used this book in tandem with the OCB to pull the points that I wanted to understand. The author has used the additional book to ensure that each chapter of the OCB is pointed and hits the mark.

   This book is a must to purchase at the same time as his first book Options Course Book. Great idea to reinforce for the reader the salient points that you want to get over

   Thank you Mr. Fontanills

   Dana

3 comments about Understanding Leaps: Using the Most Effective Option Strategies for Maximum Advantage.

1. Mark LaMoure, Boise,ID
   
   POWERFUL SUCCESS
   Do you want more Time, Safety and Security for option investing and higher profits? The truth is, one of the biggest ways money is lost in option trading is from buying too short of a length of time for investing. Discover the book "Understanding LEAPS" by authors Marc Allaire and Marty Kearney for higher success. Copyright 2003.
   
   You can solve the problem of too little time buying LEAPS. They last longer than a typical stock option. LEAPS last from 7 months and go up to 3 years in the future. LEAPS should be understood by every profit-minded investor for their precious, high-powered time benefits. LEAPS can be very powerful.
   
   LEAPS cost you about 50-90% less in price than stock, providing potentially bigger profits. Learn more about LEAPS and their profitable benefits today. Discover new possibilities.
   
   SPARKLING ESSENCE
   Ignite a new fire in your heart for winning. "Understanding LEAPS" is a premium book with insider tips and some strategies unique only to LEAPS. The book shows how LEAPS increase capital, limit losses and protect profits.
   
   Learn the true story for investing with LEAPS. The Authors wrote a hands-on guidebook defining "what, when, where, why and how" on LEAPS. The two write about advantages of LEAPS for both the Basic and Advanced investor.
   
   RATED HIGHLY
   Looking at the book's promising Table Of Contents, you see 25 Chapters and 278 pages of gold-grade material. The book is comprehensive and highly rated. I compared five similar books on LEAPS to "Understanding LEAPS." Its clearly the best of the five, by far. So I rate the book at least 4-1/2 stars.
   
   If you liked this review, please click YES. Thank You.



2. This book is written in a very methodical manner with detail coverage of each topic. The book is not one you set down a read in one or two settings but requires careful reading and study. In fact, I have read about 1/3 of the book in depth and proof read the remainder for an overview of its contents. The reason for not giving it 5 stars is I have not applied any of the trade stategies in the book and secondly there are no stock charts in book. Stock charts are an important part of deciding which option trade to apply.



3. This book is one of the best options texts I've ever read. The material is presented in a clear, easy to understand manner and is less technical than the McMillan books, but is still useful to the experienced options investor.
   
   One thing I like about the book is that it defines the difference between trading and investing and presents strategies for both options traders and investors (though I disagree with the manner in which he differentiates the two groups).
   
   As the title indicates, the book concentrates on LEAPS strategies and presents a number of conservative uses for these instruments. Included in these strategies are stock replacements, covered call writing, spreads and using deep-in-the-money LEAPS as an alternative to margining stocks.
   
   I've been an options investor for nearly 30 years and employ the more conservative strategies mentioned above to enhance the returns on my equity portfolio. While Allaire writes in a manner that is understandable to the novice, I was impressed with the subtle issues and practicle considerations he discusses for each of the strategies.
   
   He also does not over hype the strategies as so many other writers do. This is another reason for giving the book a five-star rating.

5 comments about The Four Biggest Mistakes in Option Trading, 2nd Edition (Trade Secrets).

1. This is a short easy-to-read book that contains an awful lot of valuable material for its thin size. It explains why the vast majority of options traders lose money over the long-term (despite occasional big wins), and it explains what you need to know in order to even your odds. I highly recommend this book of you are thinking about getting into options trading, or if you are a beginning options trader who wants to do better.
   
   There is big money to be made in options, but only if you are know what you are doing. This book can help you by showing you how to figure out which options have a greater probability of being profitable.



2. This small, quick read drastically changed the way I view options trading. Most of my knowledge about options has been obtained from an academic background - courses about hedging and quantitative arbitrage. I always knew that options could be a powerful tool for directional speculation, but my attempts to master it were always defeated by culprits such as time decay.
   
   It was refreshing to see that this author recognizes that the academic view of options is flawed thanks to commissions and liquidity. He writes from the perspective of a speculator. After reading this short guide, I learned that as a speculator I was committing these Four Big Mistakes of option trading.
   
   The Four Biggest Mistakes recognizes that the real market behaves much differently than the theories presented in academic class. It covers four distortions in the real market not typically taught by academia:
   
   1. Option volatility fluctuates, causing the option price to act totally out of relation with the underlying stock price
   2. Lower Deltas also mean that the option is less likely to be in-the-money at expiration
   3. Complex quant strategies are not fullproof; each complex strategy has a downfall
   4. Quant arbitrage strategies typically do not work because of a finite bid/ask price (less-than-perfect liquidity)
   
   These real-market distortions cause people to misunderstand how options work in reality and consistently suffer losses. To understand these mistakes, the book is concisely written in a format presenting 1) the mistake 2) why it causes losses, and 3) how to avoid the mistake.
   
   This is the most practical guide to options trading I have ever read. It is explained in clear language, short, and will help you become a better speculator. I recommend it if you want a realistic view of the options market.



3. I had heard about this book, but did not read it until recently. A "MUST" for all new traders. It covers mistakes made by all - stocks, options, index, futures, currency, etc. Well worth the "investment."



4. This book is a joke. It should've been a pamphlet, because the pages could've been reduced to 30 pages-tops. The 4 mistakes can be found in any basic principles of investing in stocks, futures, funds, etc.



5. Experienced traders should already know what's in this book, but those new to options trading would probably benefit from reading this book early in their careers. The first chapter, on implied volatility, is very good and Kaeppel, unlike a lot of other authors, gives you an objective method for making judgments about relative implied volatilities, which can help you shape your trading decision. Prose is easily digestible and Kaeppel slams home his points. A quick read.

5 comments about Trading Index Options.

1. The book is very good from a professional options trader and teacher.
   
   A lot of the comments from people who recently bought this old (but good) book for the software, were not diligent enough to think about contacting the author. I contacted the author and he mailed me an updated version of the software that comes with the book. He was very kind and cordial.



2. The good news is that this book is very nicely done, providing a useful foundation to beginner and intermediate options traders. I found that I learned quite a lot about the interactions between option pricing and the various factors influencing pricing. The author provides numerous case study examples utilizing the OP-EVAL(TM) software included with the book. A majority of the book contains detailed examples describing how to use the software and interpret the output. The bad news is that the software will not run on current Windows operating systems (Windows 98 or newer). So don't buy the book if you want to try the software on your own. Efforts to contact the author, through the publisher McGraw-Hill, about the possibility of updating the software, have been unsuccessful. Otherwise a good book.



3. From the beginning pages, the explanations are flowing and account for all levels of competency in options. When you finish the very readable book, you will have a solid understanding of index options. The graphs are excellent while the mathematical concepts are carefully explained. I have traded stock options successfully for the past ten years and I now have enough confidence in my knowledge of index options to not panic when hitting the enter button.



4. I was eager to use the software that came with this book, but since my PC runs on Windows 98, it will not install. They should update the software so it will run on later versions of Windows before they sell the book again, or least ask you what version of Windows you are using before you place the order.



5. The software is defective and the author and publisher, in the unlikely event you can get either to respond, only cloud the issue with disingenuous assurances.

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.

5 comments about Introduction to Stochastic Calculus Applied to Finance, Second Edition (Chapman & Hall/CRC Financial Mathematics Series).

1. I am quite familiar with this book since I enjoyed it when it was used (along with many other good books as it should) in Purdue Computational Finance program. I got to do a number of exercises from it. Some Matlab code is available on my website (click on my name above).



2. Introduction to Stochastic Calculus Applied to Finance, translated from French, is a widely used classic graduate textbook on mathematical finance and is a standard required text in France for DEA and PhD programs in the field.
   
   Most folks familiar with Steve Shreve's Stochastic Calculus Models for Finance will be surprised at its brevity, for this work is aimed at different audiences.
   
   Whereas Shreve's work is aimed at mathematicians and physicists who are coming to finance, and building on the commonalities of understandings of time series and data sets and signals, Lamberton & Lapeyre's work is aimed at an audience of mathematically trained engineers, who look at data sets as information for solving problems. Shreve's work, is, therefore, to help people come up with mathematical proofs, and L&L's is to help people solve problems.
   
   Both probabilistic and partial differential equation approaches are covered, so both those from electrical and telecommunication engineering and mechanical engineering will be satisfied and on familiar ground. Numerical and algorithmic methods are also covered for those with systems analysis and operations management backgrounds.
   
   This book, however, is decidedly for those who have had significant mathematical training. Whereas with Hull, Wilmott, Neftci, or Joshi you can play around with their approaches almost instantly in Excel or other programming tools (VBA, C, etc.), Lamberton and Lapeyre's work is for those who think out loud with a white board and others do the dirty work of coding. This work lacks specific examples, data sets, etc. Which makes it difficult to place. Its clarity and brevity are welcome, and it expands the knowledge beyond Hull of those who are not trained in math and came up the practical coding grunt side of quantfin. But it also is not a complete theoretical treatment for the first string math and theory set.
   
   In short, the book is what it is: a short primer on a large area of mathematics in finance for those well-trained in a variety of engineering and applied mathematical subjects. In other words, this book is for the French, because all the best French students are always Engineers first and something else afterwards. If you also happen to be trained as an engineer and find Hull, Wilmott, Joshi & Neftci too easy, and Shreve too hard, then this is the book for you. Or if you are like me, and you've banged your head against this stuff for years just through the happenstance of your career and want to see how a mathematician writes about your gritty world, this is a great book for shedding light in areas filled with cobwebs.



3. This book, translated from French, is by now a classic graduate textbook on mathematical finance, and provides a clear and concise introduction to the basic and important aspects of the theory. Although one of the first textbooks on the subject, it still remains in my opinion one of the best.

   The book has been written for engineering students not mathematicians and avoids the theorem/proof format, going straight to essentials.

   Also, while most textbooks on mathematical finance exclusively adopt either a probabilistic (like Baxter & Rennie) or a PDE approach to the theory (Wilmott et al, Wilmott), this book maintains the balance between the two aspects. Moreover, it does not neglect numerical methods and gives details on several algorithms for option pricing ( trees, Finite Difference, Monte Carlo) Finally, and perhaps this point is very important, the book maintains a reasonable volume while treating all these topics AND maintaining a high level of scientific rigor: all statements and notations are precise and oversimplification is avoided. Advanced topics such as variational inequalities for American options and HJM theory of interest rates are also included.

   Some drawbacks of the book are: - a complete absence of empirical data/ real life figures - no description of various kinds of derivative products, why they are used,... But then, what can you ask for in such a small volume?

   If you are an engineering/maths student and you want to discover what mathematical finance is about, I recommend you this book instead of John Hull's book.




4. As precisely mentioned in the title, this book is only an introduction; and it is not an introduction to finance, but to stochastic calculus applied to finance.

   The buyer of this book should therefore be aware of three facts:

   1. After having read this book you are not (yet) an expert on stochastic calculus applied to finance. You have to continue with other books mentioned in Lamberton/Lapeyre. But this book is an excellent framework that leads you to many important results, omiting proofs that are only technical.

   2. Mathematics is used in many other areas of Finance too (Time Series Analysis for example). What is treated in this book is only a very small part of Finance Mathematics, but an important one.

   3. One should read another book with more economic background at the same time.

   The authors begin with discrete-time models to present many important ideas in a (mathematically) simple environment before treating the contiuous models. Introduction to stochastic integration and stochastic differential equations is brief. Stochastic integration is only with respect to the standard browning motion. After having reached the Black-Scholes model and american options, the approach via partial differential equations is treated, followed by interest rate models, models with jumps and, a good idea: a chapter on simulations.

   The book has very few mistakes, no important ones, only a strange layout failure on pages 6 to 7.

   So I highly recommend this book as an INTRODUCTION to ONE important part of finance mathematics if read in combination with another book with more economic background. It can especially be used for upper graduate student seminars or as a basis for lecture courses.




5. The french initial version of this book has been one of my first technical papers that deal with stochastic calculus towards finance. It is written by and for engineers I must admit, but students in actuarial sciences (like me) won't be lost by so many formulas and equations if they agree to read with a piece of paper and a pencil on the hand. I have worked on the Vasicek's model and the simulations described have helped me a lot. Too bad that the lattice model is not explored. Anyway it is a good preparation before the opening of "Brownian Motion and Stochastic Calculus" from Karatzas & Shreve.

3 comments about Options. Plain and Simple: Successful Investment Strategies Without the Rocket Science.

1. In preparing for the Series 7 General Rep Securities Exam one of the most covered topics is on Options. This book did a much more thorough job of explaining the idiosyncracies of options trading than anything else I tried. Made a very complex topic easily understandable. Thanks for helping me get licensed!!



2. This is book is that damn good!
   Better than Courtney Smith's, Better than McMillian (unless you want the math). Better than ...

   Thanks Lenny. Pick up a couple of good pointers.




3. This book has recently crossed the 5,000 sales mark, despite distribution problems and minimal advertising. The reason is that private investors and market professionals find that it clearly explains what options are, and especially, what they do. It is practical, the language is straightforward, and the math is basic.

   I wrote OPS after trading options for ten years in Chicago and London. I have also given many training seminars over the years. The trainees found that all the options books were either too advanced, too theoretical, or poorly written. I finally got fed up and wrote my own.

   This book has sold well because it supplies a demand. If you want to read what other investors have said about it, check out amazon.co.uk. And yes, it covers bear market strategies.

   Good luck in your trading.

   Lenny Jordan