No comments about Option Valuation: Analyzing and Pricing Standardized Option Contracts (Mcgraw Hill Series in Finance).

5 comments about The Options Edge: Winning the Volatility Game with Options On Futures.

1. The major question that is answered in the book is can the option trading be profitable in the long run? Is it possible make money as an option buyer? The book is the distillation of the results of the author's major empirical investigation into option pricing carried out over a 2-year period from 1996 to 1998.
   
   Many, many theoretical works have been written (by mathematicians anxious to display an encyclopedic knowledge of the Greek alphabet) on the topic of option pricing. Virtually all theoretical works on options are needlessly complex and of limited practical use in the real world of options valuation and options trading. Much of this complexity stems from the option trading community's uncritical allegiance to the million dollar formula.
   
   This book, in the opposite, is mostly empirical. The author has directed the reader's attention to egregious instances of misleading information in the literature, especially where this information has been widely disseminated and even accepted as gospel. For all that, The Options Edge is concerned more with pragmatic issues than with theoretical arguments. The author would rather search for something of practical value than come up with another set of abstruse mathematical equations of limited applicability in the real world. There is but one Greek letter (unavoidable) in this entire book.
   
   Whereas much of what the author says applies to options in general, including stock options, the findings of The Options Edge derive from, and are specifically relevant to, options on commodity futures. The Options Edge will most likely appeal to readers with some practical experience in the trading of options. It should not be, however, your first book on options or commodity futures. Compared with other technical books on the subject, The Options Edge is rather sparing in the use of algebra and complex statistical formulae. However, the book does delve deeply into the principles of statistical inference. It also analyzes a great deal of data, but data structured in a way that anyone with an affinity for numbers should find easily digestible. The author takes it for granted that anyone interested in options is interested in numbers.
   
   Enough said, this analyzes popular misconceptions and irrational beliefs, when it comes to options on commodity futures. If you are interested in similar analysis to the market in general, I would recommend The Only Three Questions That Count by Ken Fisher.



2. This book contains some very useful information for people who write options and wonder if their profitability is sustainable over the long run (hence the title "options edge"). Although Gallacher states that the edge between writers and buyers is zero (based on his empirical evidence); he illustrates that writers still can make consistent positive return on their trading, as long as they sell implied volatility which exceeds historic volatility and as long as they cover their short positions in options with futures at strike. Unfortunately, Gallacher doesn't compare LEAPS to futures as a way to cover short positions in options. An easy and enjoyable read!



3. This book contains some useful information for option writers who wonder if their profitability is sustainable over the long run (hence the title "options edge"). Although Gallacher states that the edge between writers and buyers is zero (based on empirical evidence); he illustrates that writers still can make consistent returns if they sell implied volatility which exceeds historic volatility and if they cover their short positions with futures at strike. The book is easy to read and I finished it in half a day.



4. The research work is better than most available and the writing very good (See his other book as well). However if somebody can answer the following: Isn't there a risk of blowing up the strategy with a string of limit days? They may be rare, but their effects are extreme (see Nassim Taleb's site and/or book). At one point limit days are mentioned; they are handled by using the price at the limit. This assumes that one can trade futures at the limit price, which is not a guaranteed thing. Otherwise, the new and refreshing look at option pricing is excellent. Clearly accuracy is more important than precision in markets with bid/ask spreads and Mr. Gallacher is able to cut to the core of the issue. Lots to consider, but that one problem remains.



5. This book is a very enjoyable read. The author uses real world data from options on futures to demonstrate where the edge really lies, allowing the trader to improve his chances. It is written in a very practical manner, showing the many weaknesses of highly theoretical option pricing models and why they rely on needless mathematics. The reader will see how options work in the real world. This book has been written by a real trader not a theorist. As a options trader myself, I would highly recommend this book.

5 comments about Buying and Selling Volatility.

1. To get the most out of this book one needs to understand its original objectives. Many reviews seem to be critical of its elementary nature and concentrate on disputing its usefulness to those involved in advanced quantitative finance. I was initially skeptical of this book but a colleague insisted I look at it.
   
   Connolly's analysis of option volatility and the `Greeks' is brief but precise and always to the point. (Why take five pages when you can do it in one?) The book is written without the use of complex equations so as not to intimidate the reader and appeal to a wider audience of new entrants to the field (both academic and practical). It is not intended to be the definitive options strategy guide guaranteeing instant profits. It does however give the reader a solid grounding in options fundamentals and leaves the reader confident in their ability to tackle texts of a more advanced nature.
   
   Those comparing the lack of detail in this book to more advanced works have completely missed the point of this text. Even today, no other book (including Baird) equals this text in terms of introducing and explaining the mechanics of options.



2. Kevin B. Connoly's "Buying and Selling Volatility" is a useful work for beginning option traders and market makers, especially those coming from other fields. However, one should be strongly cautious on two fronts: 1) the book is now outdated by some years, both in strategies and more sophisticated technological advances (faster and better random number generators, automatic execution, VBA & C++ code, utilities, Excel advances, distributed networks, etc.); and 2) this book only addresses some simple strategies, and senior desks and hedge funds will be light years beyond those described here.
   
   Both of these caveats are as one should expect from a book. Think about it, if Connolly had the holy grail of volatility trading, he would not write a book about it, he would be trading options.
   
   This book, followed by Baird's superior work "Option Market Making" should give beginning junior traders and trainees a good foundation in basics, vocabulary, model techniques, etc. However, one should not look at this book as the only answer or a prime reference or authoritative. The chief advantage of BaSV is that it isolates option trading and techniques as a topic. In most other finance books, or even option pricing books, strategy and market making are left to the reader to figure out for themselves. Connolly joins Baird in writing from the perspective of a trader, not an academic. For this perspective alone it may be useful. However, for those with limited budgets, I suggest buying only Baird, and skipping this work.



3. Very basic book not worth the $1.... I have been in the derivative market for 5 years. For a beginner, there are much better books out there that cover all the material of this book in one chapter.



4. The best way explained how an option price is calculated - use a dice ! The rest is ... idea-giving, good.



5. I found this book to be a good beginner book in trading . The chapters didn't go into much depth for more advanced traders . I would say that if your imtimidated by math then this book will be a good buy , but if you want depth and a bang for your buck ..you could do better.

2 comments about The Complete Guide to Employee Stock Options: Everything the Executive and Employee Need to Know About Equity Compensation Plans.

1. I agree with the following endorsements on the book:
   
   "A comprehensive, easy-to-understand guide that shoudl be part of every entrepreneur's library. It demystifies one of the most important aspects of starting and running a company." Shawn M. Marcell, Senior Vice President of Corporate Finance, Boltyon Capital Corporation and adjunct professor, the Wharton School of Business
   
   "This book is a must-read for company owners who are interested in attracting and retaining key employees." Morris Gocial, CPA, Gocial and Company, PC



2. I believe the title of this book should be "The Complete Guide to Exit Event Stock Options". The author makes his preference for Exit Event stock options clear early on, and throughout the book focuses his attention in that direction. For those of you who don't know, exit event options are stock options that only vest when a company is sold or completes it's IPO. This is a reasonable approach for companies that are likely to seen an exit event in 2-3 years, but not for a company just starting out.

No comments about Computational Methods in Financial Engineering: Essays in Honour of Manfred Gilli.

No comments about Selling Covered Calls: The Safest Game in the Options Market.

3 comments about Option Theory (The Wiley Finance Series).

1. At the right mix - the author is not telling what you already known but aiming at bring you to the next level, I think.



2. This is an excellent book if you have at least a master's
   degree in math or a related discipline.
   If your eyes glaze over a page full of equations, then this is
   not for you.
   Having said that, for the fearless that want to get a good
   understanding of the underlying theory - it's an excellent work.



3. This book is not for everyone. It is not for those who just want a once-over-lightly introduction to options. But it is the perfect book for those who want to combine rigor and practicality. Unlike the many books by mathematicians who claim to be writing for a general audience but in fact are trying to impress their colleagues (mostly by being unintelligible), James writes extraordinarily clearly. But even more important, he has practical experience with all the solution techniques he describes (binomial models, differential equations, Monte Carlo), and expertly describes their uses, their limitations, and the relationships among them. Unlike many authors, he has no apparent bias towards any one of the three solution methods. He also presents numerical examples to illustrate his points. The final section of the book is mathematically more advanced, and allows the reader to ascend to a higher level of sophistication. It's clear that James wants the reader to understand. Bravo!!!

   This may be the perfect book to read after mastering a superb introductory text like Robert L. McDonald, Derivatives Markets.

1 comments about How to Start Trading Options: A Self-Teaching Guide for Trading Options Profitably.

1. Kevin Kraus, president of CSM FUTURES GROUP, wrote Start Trading Options: Self-Teaching Guide for Trading Options Profitably. In this soft-cover book of 178 pages, Kraus delivers a straightforward options education in six chapters covering commodity and futures market basics, options basics, buying and selling options, option spreads strategies, advanced strategies, and risk management. Most chapters follow a similar format containing an explanation of the subject matter, numeric examples and tables, a few short quizzes, a chapter test, and key terms.
   
   I found it surprising that Kraus uses commodity options as the basic options type explained in the book, considering that most beginners would probably be more interested in and familiar with equity or index options examples. Interestingly, except for two examples with bonds, all the examples use commodity options. In any case, the method of trading and the strategies used for trading either commodity or stock options are similar. However, the underlying fundamental news is unique to the underlying option type.
   
   The writing style is simple and easy to follow. There are many numerical examples, so the reader needs to work through the numbers to see the profitability parameters of the particular option strategy. Readers coming in with a lackadaisical attitude toward the examples or skipping them will not receive the educational benefits of this book.
   
   After reading the book, the reader will have a good understanding of the subject matter. That does not mean that options trading should be immediately started. A much deeper knowledge of trading, technical and fundamental analysis, trading psychology is needed to be successful.
   
   At the end of the book, the author provides 16 useful tips and tricks for successfully trading options. After reading this book, you will have a basic understanding of the options markets and strategies. However, before risking any money, I would suggest that you find a mentor or simulated trading environment to test different strategies. Only after extensive practice should you put your money at risk.

1 comments about Penny Stocks: How to Profit With Low-Priced Stocks.

1. This is the most comprehensive guide to cheap investments! When I started thinking about stock investments, I ran across this book and it made all the difference in the world. This book has all the information a beginning investor will need and still now as an amateur investor I still find this book helpful. I recommend it for anyone looking to invest.

2 comments about Keys to Investing in Options and Futures (Barron's Business Keys).

1. short, concise, and to the point. I'm not a 5 star person so I may be a bit harsh



2. Good review of options and futures trading. Each section is just 2-3 (short) pages, usually with an example or two, which makes the book very easy to pick up and read a little at a time. Since each section is so short, it also serves as a useful quick reference.

   For more detailed reading on options/futures trading, I'd suggest finding another book. Use this mainly for quick reference, or as a refresher.