1 comments about Simple Steps to Option Trading Success.

1. Steve and Jim break down the option trading process into small, digestible pieces. They cover basic to complex strategies for achieving a variety of trading goals with easy-to-follow explanations. The handy "Visual Position Reference Guide" reinforces, at a glance, every key concept. And, they clearly show how to benefit from the new software available to investors.

No comments about The Business of Options: Time-Tested Principles and Practices.

No comments about Risk Reward: The Art and Science of Successful Trading.

No comments about Selling Short: Risks, Rewards, and Strategies for Short Selling Stocks, Options, and Futures (Wiley Finance).

5 comments about Your Employee Stock Options.

1. I am re-reading "Your Employee Stock Options" by Alan Ungar and Mark Sakanashi to sharpen my stock option knowledge.

   This book is not only a must-read for anyone who owns options, but it is invaluable to me in my financial planning practice. The concept of "Critical Capital" is the most common sense way to look at the timing of cashing in options that I have seen. My clients benefit by having a rational way to look at how options can best be used to reach their financial goals.

   Throw in the tools available on the website, and you have a complete resource for guiding yourself or your clients through the complicated maze of stock options. I highly recommend this valuable book.




2. I found this book very helpful in deciding how to manage my option portfolio. It helped me to think about risk assessment and the assessment of future potential of my options.

   I really like the practical and useful information in the book. Which options should I exercise first and why? Should I sell or hold...how many and for how long?

   By using the tip from the book regarding the AMT "sweet spot" I found I could exercise a number of ISOs in 2001 without incurring AMT in excess of my normal tax liability. I also used the tip on stock exchanges.

   Very helpful. Well worth the price.




3. I am a Certified Financial Planner with over 30 years experience. My staff and I deeply appreciate the authors' concept of Critical Capital as a tool for helping clients determine when to exercise and when to sell their stock options. Their companion web-site reinforces the points they make and is easy to use. The chapters on why to hold and when to sell options is a must read for anyone who owns options or anyone who advises clients with options.



4. After reading this book, I'm perplexed. A few "so-called" financial advisors recommend it highly, yet I found it rather weak. I also work in finance for a living and have done so for much of my life. As for the reader who says if financial people all knew so much, they'd all be rich, he's right, many of them are. But not because of following the advice in this book. Probably because a few of them have you buy a poor written book, link you to a dubious website, and cash in membership fees...
   It's so bad, it would seem that the authors are either writing their own reviews or having their friends write them. I found myself mortified to have bought this book, save your money and search the web for real-world advice.



5. What else can I say other than this book was a total waste of time and money. I find it incredible that anyone with even mediocre intelligence would rate it more than one, or two stars. Some of the reviews on here are no doubt written by the authors or their friends.
   In all my years working in finance and accounting, and all the books and studies I've read, I must say I have never read such a clearly self-promoting tripe as this. After viewing their Website, it turned my stomach.

2 comments about Pricing and Managing Exotic and Hybrid Options.

1. One of the best books on this topic. It is a very practical book for someone with practical background. No sigma algebra to confuse you, and you do not have to know Girsanov to understand the quanto effect. You just focus on those tough issues you are running into everyday: correlations, long dated FX, cross Gamma hedging, strategic risk management for an exotic book, transaction cost in illiquide market, and so on. In addition, last paragraph of the book is the every reason make me think why this book stands out among these many books.



2. I find this book extremely useful in my job. It covers almost all aspects of exotic and hybrid instruments: the real life examples, theory behind the pricing models, implementation using different numerical methods, hedging and risk management issues, a good appendix on the basic math stuff and even a sample VBA code to do multivariate MC. Most importantly, the author took a practitioner's point of view, which makes the materials much easier to be understood and applied. However, I did encounter quite a few errors inside some of the formulas. Just name a few, Eq 3.15 and 3.18 on pg 53, Eq 3.142 on pg 98 and Eq H.61 on pg 336. However, none of them is serious (more like a typo to me). In addition, I think it is more important to get the idea right. You can always double check the formula against any math reference book. Overall, I feel it is an excellent reference book for anyone with a serious interest in structured derivatives.

No comments about Managing Currency Risk Using Foreign Exchange Options (International Treasury Management Series).

1 comments about Financial Options: From Theory to Practice.

1. This book explains how to assign a value to options in understandable terms. Some knowledge of calculus is helpful but not necessary to grasp the concepts. Equations are given for those interested.

   A number of example portfolios consisting of calls and/or puts are given. Each portfolio is described in terms of aggressive or conservative, sensitivity to volatility, and performance relative to movements in the underlying stock. Graphs show the current and expiration date values of the portfolio versus the price of the underlying stock.

   Baxter's book, "Financial Calculus: An Introduction to Derivative Pricing", concentrates on the math. This book puts its emphasis on trading strategies.

5 comments about Options: Perception and Deception : Position Dissection, Risk Analysis, and Defensive Trading Strategies.

1. I wanted to comment on my experience with the book and some of the other customer reviews.
   
   You do not need to be a market maker or veteran options trader to read and get value from this book. I am a retail options trader, with a very serious full time job, and have virtually no mathematical aptitude, and I have already started benefiting greatly from the book.
   
   In my opinion you should make sure you have basic familiarity with how options work, and some of the basic outright positions and spread techniques and what market view they support, and you will be ready to start learning what options are really about from there. You cannot go wrong by using this book and Mr. Cottle's other materials as the very next step.
   
   Be under no delusion---after the basics---options can get very complicated very quickly--if you let them. I have discovered, contrary to my initial impression, that Mr. Cottle in fact through the use of detail is really attempting to simplify option strategy decisions and trading itself. Through the use of what seems to be complicated examples---CC cuts through the fog and gets to the meat of options strategies and how and why one might choose one over the other--and invariably the best choice is something straightforward.
   
   Based on what I know about him and my experience with his materials, he is committed to teaching. If you expect to read this book without pen and paper in hand, with little or no effort on your part, and have him simply say "do x and you will get rich" this book and his approach is definitely not for you. He is like any good teacher. He will make you work for the answer, but not leave you hanging when you struggle. In working for the answer---and having his approach, experience and techniques available--you will most assuredly gain a grasp of options and how to make money trading them that you never had before.
   
   Don't be intimidated when you first view the book. The presentation looks strange, the tools he uses will be different from those you have seen or used before, and the terminology will be strange to some. There is a reason he takes the approach he does and it will, with a modicum of effort, become clearer every time you are exposed to it and use it.
   
   Here is what it has done for me.
   
   It has forced me to actually think about what may be happening underneath the option quote and the day to day change in a position.
   
   It has convinced me that trading outright positions whether short naked or long does not necessarily produce the best results. Yes longs are problematic due to all the standard theta reasons, and yes naked shorts are risky---we all know that---the trick is to figure out how to take the inherent advantages of either of these approaches, and make them work for your view of the market without getting killed in the process.
   
   What he has made me a believer in is that risk can be reasonably controlled, while still making very attractive rates of return, and if you are looking for a method to make reasonable returns in the market, the raw tools are there for the taking.
   
   He has convinced me that uncomplicated but well constructed spreads, for debit or credit, can actually allow me to participate in the market with a reasonable expectation of success, and allow me to sleep at night in the process without position adjusting every 10 minutes. He has also made me a true believer that options, by their very nature, provide huge flexibilities that outright underlying positions cannot, and allow much wider margins for error if I prove to be wrong in my view in any given position if they are structured correctly in the first place.
   
   You do not have to be a rocket scientist to make money in options. In fact if you arbitrarily go out and sell an option this afternoon at random, odds are it will expire worthless and you will make money. The problem lies in the odds piece that is not in your favor. You also do not have to be a rocket scientist to get killed by these odds. Although small in most cases, when it goes against you---you will be dead unless you are very savvy and well prepared to deal with such an eventuality. This is the piece that CC is so good at getting at--managing the underlying risks in any given option situation, structuring the position correctly and buying or selling it right to hold as much risk as possible in check--while still giving you the opportunity to make some money.
   
   The thing that finally made me a believer was the time he took to talk to me. He is not a prima donna. When I had concerns about spending even one more nickel on books, learning materials, educational seminars, etc. because so much of what I spent has been a waste of money and merely kept the educator in new Mercedes for so long---CC came through with flying colors. He took almost a half hour and spoke with me on the phone, and since then has never failed to answer a polite note or inquiry in his forum on his website Riskdoctor.com. He certainly is not getting rich from my buying the book or a seminar tape as his prices are very fair and honest. All these factors have convinced me that he must have the true teaching bug and his desire is to teach and help me improve.
   
   He is not an easy taskmaster--and he is not going to tell you what to trade. He is a good teacher and like any good teacher he always tries to stay out in front of you a bit with his teaching and materials. This is a good thing for those willing to stretch just a little because the nuances start to emerge very quickly. The best part is he is there to get you untangled when you do get stuck in the weeds.
   
   One more thing, after you read through the book once---go on his website and spend a little money and get one of his taped training sessions that he has actually done with live students [I started with Straddles and Strangles]. It will DEFINITELY help you clear some of the confusion that the book will inevitably create.
   
   If you want to know more about options than any of these get rich books can ever tell you--buy the book---it will pay for itself many times over in your first couple trades, and the bonus is you will understand why it paid for itself, rather than your just having made a lucky guess or two.
   
   DDK



2. I wanted to comment on my experience with the book and some of the other customer reviews.
   
   You do not need to be a market maker or veteran options trader to read and get value from this book. I am a retail options trader, with a very serious full time job, and have virtually no mathematical aptitude, and I have already started benefiting greatly from the book.
   
   In my opinion you should make sure you have basic familiarity with how options work, and some of the basic outright positions and spread techniques and what market view they support, and you will be ready to start learning what options are really about from there. You cannot go wrong by using this book and Mr. Cottle's other materials as the very next step.
   
   Be under no delusion---after the basics---options can get very complicated very quickly--if you let them. I have discovered, contrary to my initial impression, that Mr. Cottle in fact through the use of detail is really attempting to simplify option strategy decisions and trading itself. Through the use of what seems to be complicated examples---CC cuts through the fog and gets to the meat of options strategies and how and why one might choose one over the other--and invariably the best choice is something straightforward.
   
   Based on what I know about him and my experience with his materials, he is committed to teaching. If you expect to read this book without pen and paper in hand, with little or no effort on your part, and have him simply say "do x and you will get rich" this book and his approach is definitely not for you. He is like any good teacher. He will make you work for the answer, but not leave you hanging when you struggle. In working for the answer---and having his approach, experience and techniques available--you will most assuredly gain a grasp of options and how to make money trading them that you never had before.
   
   Don't be intimidated when you first view the book. The presentation looks strange, the tools he uses will be different from those you have seen or used before, and the terminology will be strange to some. There is a reason he takes the approach he does and it will, with a modicum of effort, become clearer every time you are exposed to it and use it.
   
   Here is what it has done for me.
   
   It has forced me to actually think about what may be happening underneath the option quote and the day to day change in a position.
   
   It has convinced me that trading outright positions whether short naked or long does not necessarily produce the best results. Yes longs are problematic due to all the standard theta reasons, and yes naked shorts are risky---we all know that---the trick is to figure out how to take the inherent advantages of either of these approaches, and make them work for your view of the market without getting killed in the process.
   
   What he has made me a believer in is that risk can be reasonably controlled, while still making very attractive rates of return, and if you are looking for a method to make reasonable returns in the market, the raw tools are there for the taking.
   
   He has convinced me that uncomplicated but well constructed spreads, for debit or credit, can actually allow me to participate in the market with a reasonable expectation of success, and allow me to sleep at night in the process without position adjusting every 10 minutes. He has also made me a true believer that options, by their very nature, provide huge flexibilities that outright underlying positions cannot, and allow much wider margins for error if I prove to be wrong in my view in any given position if they are structured correctly in the first place.
   
   You do not have to be a rocket scientist to make money in options. In fact if you arbitrarily go out and sell an option this afternoon at random, odds are it will expire worthless and you will make money. The problem lies in the odds piece that is not in your favor. You also do not have to be a rocket scientist to get killed by these odds. Although small in most cases, when it goes against you---you will be dead unless you are very savvy and well prepared to deal with such an eventuality. This is the piece that CC is so good at getting at--managing the underlying risks in any given option situation, structuring the position correctly and buying or selling it right to hold as much risk as possible in check--while still giving you the opportunity to make some money.
   
   The thing that finally made me a believer was the time he took to talk to me. He is not a prima donna. When I had concerns about spending even one more nickel on books, learning materials, educational seminars, etc. because so much of what I spent has been a waste of money and merely kept the educator in new Mercedes for so long---CC came through with flying colors. He took almost a half hour and spoke with me on the phone, and since then has never failed to answer a polite note or inquiry in his forum on his website Riskdoctor.com. He certainly is not getting rich from my buying the book or a seminar tape as his prices are very fair and honest. All these factors have convinced me that he must have the true teaching bug and his desire is to teach and help me improve.
   
   He is not an easy taskmaster--and he is not going to tell you what to trade. He is a good teacher and like any good teacher he always tries to stay out in front of you a bit with his teaching and materials. This is a good thing for those willing to stretch just a little because the nuances start to emerge very quickly. The best part is he is there to get you untangled when you do get stuck in the weeds.
   
   One more thing, after you read through the book once---go on his website and spend a little money and get one of his taped training sessions that he has actually done with live students [I started with Straddles and Strangles]. It will DEFINITELY help you clear some of the confusion that the book will inevitably create.
   
   If you want to know more about options than any of these get rich books can ever tell you--buy the book---it will pay for itself many times over in your first couple trades, and the bonus is you will understand why it paid for itself, rather than your just having made a lucky guess or two.
   
   DDK



3. Reviewer: The author, Charles M. Cottle *** charles@RiskDoctor.com
   Although this original text was written for professional market makers, it proved to be a valuable resource for sophisticated retail investors and hedgers. I therefore created a new book, "Coulda Woulda Shoulda" (available for free download at www.riskdoctor.com) which borrowed about 80% of the original text and added more tools for non-professionals including an email dialogue with a relative novice, spanning 2 months. Most of the strict market making tools have been removed but will be resurrected in book 3; "Taming Your Portfolio" due out later this year.



4. There are basically two types of options books: mathematical
   books on valuation that tend to be filled with solutions
   for ever more exotic contracts, and books for traders that
   go over the practical workings of positions in various
   concrete scenarios. Cottle is definitely of the second type.
   There's not really much math in it, unless you're intimidated
   by three-dimensional graphs. What it does have is an incredible
   wealth of insight, from experience, into the tricks and the

   exceptions--the rent-a-call, the dividend plays, contract
   risk and post-expo deltas, complicated synthetics, the
   interrelations between greeks.

   That said, what moved me to write a review was to take
   exception with a previous reviewer's comment: "No lazy
   editing or prose here". The prose is okay, but the editing
   is worse than lazy--it's horrendous. Flipping my copy open
   at random I come to p.151-152 on Break-Even analysis. Try
   finding column 7 in exhibit 4-23, or the supposed arrow in
   column 4. It's all a mess. That's an extreme case, but
   throughout the text, it's hard enough trying to pick up
   the bond options lingo (futures in 32nds but futures-options
   in 64ths--all "ticks"; and the different multipliers for
   indexes and futures), without having to deal with missing
   words, inaccurate references, etc, etc. But ultimately, working
   to figure it all out gets you to understand it all the better.

   With five years of floor trading as an equity options market
   maker, and having read and reread and rereread... Natenberg,
   Baird, Hull, Connolly, Cox Ross Rubinstein, Chriss, Taleb--and
   others--I'd say Cottle is clearly the best book. That said,
   however, I don't know how much use a non-professional--someone
   who doesn't manage a large, actively traded book of options--
   will get out of it. It should be intellectually rewarding if you
   can figure it out. Maybe inspire you to go look for a minimum
   wage clerking job in Chicago, NY, Philly, or SF to get abused
   for a year or so and then maybe get a badge.




5. I read Options: Perception and Deception at least 3-4 times before many of the advanced concepts began to sink in. This is not a book for an options novice; in fact, I would suggest that most people read Natenberg's book on options prior to engaging in this incredible text. While many of the advanced 3-D graphs were beyond my grasp, I particularly liked Cottle's description of "real world" options positions, how he executed them and how he managed them throughout their duration. Of particular interest to many readers should be the concept of "gamma scalping", and the section on wingspreads and adjusting positions. This text is so far beyond "mainstream" options books, that words do not describe how important this book will become.

1 comments about Applied Derivatives: Options, Futures and Swaps.

1. This is a very well written book from an MBA's perspective. In other words, the emphasis is more on intuition rather than the underlying mathematics of option pricing. The book in fact starts with the Binomial Tree approach to option pricing - a method that is much more intuitive and powerful compared to Black-Scholes. The author walks you through certain arbitrage relationships before developing the binomial tree approach. Black-Scholes is introduced once you have obtained a thorough understanding of the binomial tree approach. There is a decent treatment of Forwards, Futures and Swaps and a very elegant proof for how CAPM weaves into option pricing. I strongly recommend the book to anyone starting out in option pricing. Once you have developed sufficient competence with trees and formulae, you can move to Hull's book which is much more technical but provides robust treatment of exotic options.