5 comments about Option Pricing Models and Volatility Using Excel-VBA (Wiley Finance).

1. This is a great book to own. I'm doing trading job on the street and also need to build models all the time. I was looking for a handy book explaining how to build some models using Excel VBA. And this is the only book I found in the market which exactly fits my needs. The model building methodologies are clear and advanced, code is very applicable, not hard to understand and implement yourself. The most important, the models author introduced in the book are very useful and exactly what we need to build and use in my job. So generally, it's a must-have book if you're working on the trading floor or need to build models using VBA. BTW, the book omits some codes (as some reviewer points out), but don't worry, all the completed codes can be found in the disk. So it's not a problem if you use the disk.



2. When I purchased this book I was looking for a quick way to get reliable code implementing the Heston model in an Excel/VBA environment. In particular, I was doing research work on long dated options. I found the book useful but my expectations were not met.
   
   The book was useful in that it introduced me to complex variable techniques for Excel/VBA and illustrated a reasonable approach to solving the Heston model. The devil was in the details.
   
   The VB routines on the CD often fall over for long dated options (underflow/overflow) and some well known subtlties of complex calculus appear to be ignored (e.g. keeping track of the branch you are on for the complex logarithm). All of these issues were within my power to fix but I was dissappointed that I had to spend that much time on it.



3. Starting from the very basics (Newton Raphson, Ordinary Least Squares etc.), this book covers pretty much everything about option pricing including Heston's Stochastic Volatility model! The code is easy to understand and it actually works. Every chapter has practice problems at the end, and the best part is - the book also has solutions to them! So immediately after reading and executing the code provided on cd, you get to work on problems plus get help from provided solutions if you get stuck.
   
   This is really a practitioner's gold. Dont expect much theory and background about various models. But yes, this book will definitely teach you how to implement them. A must buy. Great work, authors.
   
   Cheers.



4. This book is written for practitioners rather than for academics. As such, it contains little proofs, but rather concentrates on providing very clear descriptions of the models and VBA code to implement them. The book is very well thought-out and clearly organized. I was amazed at the contents because there is some very good material in there that I could not find anywhere else.



5. I recommend this book for my Volatility Analysis module (for ICMA Centre MSc in Financial Risk Management and MSC Financial Engineering). It is particularly useful for the Financial Risk Management (FRM) students because, of the 2 groups, these tend to have less background in mathematics and programming. It is useful to have the numerical methods explained together with the option pricing models in one book, and the FRM students really appreciate the VBA code, which ties in very well with some of the practical workshops.

5 comments about DeMark On Day Trading Options.

1. I am a fan of Demark's indicators if you or I can ever get them. His indicators are only given to high dollar companies like reuters. My reading of this book was a painful process of trying to understand a indicator I cannot even use in trial applications. IT is clear that Demark has left his loyal following to make up bargin basement Metatrader indicator rejects. Like most in this business.....business comes first. I rank this has a 3 and the only reason it got a three was because of the quality of the work. Demark is really only valued by the traders who honestly don't need him to trade like myself. If I was a rookie and pick up one of his books I would not trade the markets because of the over don't explanation and indicators I could not follow. Do not read the reviews folks. They seem real suspect. Make a simple explanation book Demark and make your real indicators available.



2. The previous reviewer cites the perception of the author's inflated ego. I too was distracted by the author's tendency to refer to "TD" indicator this and that and this disturbed me. However, i had the good fortune to meet the author at a Bloomberg seminar and the author explained why he chose to preface his indicators with the 'td'. The justification he gave was that his attorney wanted him to trademark and control the indicators and that was the effective way for him to accomplish that goal. I accept that reason and more than that I can overlook the petty complaint that it is distracting by concentrating upon the value I find in the indicators. I say call them whatever the author wants to since bottom line they are the best I have seen in my 35+ years in the industry.



3. You may want to think twice about this one. Not to be negative, but it is very hard to follow. Clear and concise dialog is absent in favor of unnecessary "branding" if you will of common techniques mixed with completely unverified and difficult to back test methods for trading the markets. This is trading celebrity gone wrong. I would love to know the remaining balance of an investment account traded with these "TDious" indicators. You can at least save yourself from this trade.



4. My trading partner introduced me to the author's work. He told me that the author had worked closely with Paul Tudor Jones, Leon Cooperman, Steve Cohen and other industry titans. To be associated with these guys, he had to have something of value. After reading his books, my conclusion is that he truly possesses a creativity and market awareness that is unmatched in the industry. Although the ideas he presents can be profitably applied, I am certain that he does not share everything he knows with the reader. Regardless something is better than nothing.



5. Prior to xmas and on my birthday I received a copy of DeMark's 'New Science of Technical Analysis'. I have been a professional trader for over 20 years and currently head up the trading operation at one of the major Wall Street firms. I thought I knew how market operateed and I shared my expereince on TV, radio, and in newspapers for years. Upon reading this book and as well ass the other two in the DeMark set, I have gained a profound new awareness how markets truly behave. The author is beyoind peer in defining and describing the intricacies of price behavior. What an enlightening series of reads.

5 comments about LEAPS: Long-Term Equity Anticipation Securites: What They Are and How to Use Them for Profit and Protection.

1. If you want to learn about the many LEAPS trading strategies in existence, this book is for you. If you want to learn the theory behind LEAPS (and options) then you have to buy a different book.



2. This is probably the worst written book I have ever read. The author obviously understands the topic but it is one thing to know a subject and another thing to teach it. I am a physician and I have read my share of books.



3. This book, published in 1993, is now a classic and the definitive guide to trading LEAPS. It provides an excellent introduction to LEAPS and takes the pain to explain how LEAPS differ from traditional options. If you already have knowledge of options, this book will be a breeze to you, thanks to the author's lucid and humorous writing style. Do keep in mind that LEAPS are more than just longer-term options; pricing them using BS, for example, would be quite wrong.

   Which brings us to the drawback of this book from the early 90s. Much as changed to LEAPS -- the demand, the valuation methods, the trading mechanics -- since 1993, and this book would have remained great had it been updated. As it stands, you should definitely use it in conjunction with the web to make sure you get the latest info on these securities.

   One last thing: if you are set on trading LEAPS, make sure your broker can accommodate it. My online broker is great for trading options, but it turns out they won't allow LEAPS for accounts less than $50k, which include mine.

   In short, I recommend this book highly as a primer to LEAPS. Read it from cover to cover and make sure you duly understand all the RISKS involved, not just the potential gains. Good luck!




4. LEAPS is a helpful manual and it can be followed by readers who have basic knowledge on options. Roth analyzes in a very vivid and enjoyable way LEAPS and offers to the investor all the necessary background. I really enjoyed reading it.



5. This book is clearly written and was well worth buying. I wish I could benefit further from this man's work and knowledge, but unfortunately he died several years ago.

3 comments about A Course in Derivative Securities: Introduction to Theory and Computation (Springer Finance).

1. I definitely agree with other reviewers, besides answers are available. As a matter of fact, I request professor Back whether he has solutions somewhere. He prepared them and emailed to me. What a great person. As a non-quant, I find this book very accessible and clear. Also VBA examples provide useful insight into implementing models, also something I value highly.



2. I have read literally dozens of books on stochastic calculus and derivatives. This one is different in one aspect. It uses the change of numeraire technique wherever it is possible, to make complicated things simple. Most of the books treat it (and use it) only in a small chapter or only refer to the paper of Geman, Jamshidian, El Karoui. I understood this technique before, but here it is used so often that it actually becomes your technique and your weapon. Very powerful, I would like to thank the author. One star less because there are no solutions to exercises.



3. Dr Kerry Back in my opinion wrote one the best if not the best practical book in financial Derivatives. In such a crowded field where books are published at an exponential rate; finding a practical book is often a challenge especially since many of them repeat the same information over and over. The best feature of this textbook lies in the problems at the end of chapters. The problems are well chosen and very practical and require the use of VBA/Excel. This book does not get involved with complicated math as so many books in financial engineering do. I am doing a Phd degree in math, I deal with abstract mathematics on a daily basis so am looking for a textbook that will provide a good intuition to the concept of Derivative Securities without sacrificing too much Mathematical rigor. In this regard Dr Kerry Back did a very good job, the book requires only an understanding of non-measure probability theory, calculus, linear algebra and differential equations making it accessible to MBA students and undergraduates as well. I strongly recommend this book to math majors who want a textbook that explain Financial Derivatives well. I also recommend Stochastic Calculus for Finance II by Shreve for readers who want a measure theoric and PDE approcah to Financial Derivatives.

4 comments about Options Markets.

1. This was our options text book at the MIT Sloan School of Management. For all the technicalities involved, "Options Markets" is relatively easy to understand and follow with plenty of examples charts, graphs and tables.

   John C. Cox and Mark Rubinstein also provide sage advice and recaps, even far into the book, for example:
   "for initiating and maintaining neutral positions:
   1. Never initiate a neutral position where one side of the position is unfavorable
   2. Whenever one side...becomes unfavorable, liquidate that side and replace it with another option with a favorable price
   3. Never adjust by buying an overpriced option or selling an underpriced option
   4. If possible, always adjust by buying an underpriced option or selling an overpriced option

   Although the book is a little old, the fundamental principals are sound and so well explained as to make this a truly valuable learning tool for puts, calls, market structure, general arbitrage relationships, exact option pricing formulas, and general option applications.




2. I bought this book 7 years ago, and just recently took it back off the shelf to read/reread sections related to my current work. Book is packed with explanations that facilitate understanding of these complex instruments. And it's nice to see how the binomial model is developed by its inventors. I highly recommend this book to all seeking to understand how to price and analyse options. The reason I gave it 4 stars was that book has an equities focus.



3. Always an up-to-date work. The excellent analysis of every aspect of options ranks it a must for the researcher (speculator or agent trader) in order to comprehend thoroughly the real nature and forces of the derivative instruments of the markets and obtain a strong infrastucture for consequent reading on strategies and technical analysis. Mathematics of the book are plain and worth reading to the last equation, for they prove to be the key to the understanding and valuation of any novelty work on the subject.The authors' state-of-the-art multiple remarks and explanations on options prices,their factors and sensitivity factors makes it an everyday's book, besides its academic value. A stand alone book for traders that once you get it is to be read over and over in sequence with any new techniques to be tested.



4. Always an up-to-date work. The excellent analysis of every aspect of options ranks it a must for the researcher (speculator or agent trader) in order to comprehend thoroughly the real nature and forces of the derivative instruments of the markets and obtain a strong infrastucture for consequent reading on strategies and technical analysis. Mathematics of the book are plain and worth reading to the last equation, for they prove to be the key to the understanding and valuation of any novelty work on the subject.The authors' state-of-the-art multiple remarks and explanations on options prices,their factors and sensitivity factors makes it an everyday's book, besides its academic value. A stand alone book for traders that once you get it is to be read over and over in sequence with any new techniques to be tested.

5 comments about Option Market Making: Trading and Risk Analysis for the Financial and Commodity Option Markets (Wiley Finance).

1. It is one of the best books on option trading available in the market. It is really amazing how the author has been able to write the material so long back and it is still very relevant. It is not at all elementary level though. You should be very conversant with options before reading and appreciating this book in a true sense.



2. Anytime anyone is willing to credibly tell you what he does to make money over the long run with well defined low-risk strategies you should listen because casinos, banks, and insurance companies certainly do. The author implies a positive expectation to option trading and those who make a living doing it would agree. The book has a conversational read and has something for the novice to the successful option trader. Highlights are: Delta neutral trading, gamma scalping, the use of spreads to enter, lay off risk and adjust, and emphasizes long volatility trading. The title of the book has probably disuaded more traders from buying the book because it is equally benefical to those who are not option market makers.



3. pretty outdated... the ratio of the added value of the book to the time spent to read it is far below than i expected..



4. Baird's "Option Market Making" is the *other* essential options book that any serious practitioner should read. Whether you are buy-side or sell-side, or trading your own book, this work is fundamental and extends where Hull leaves off. In short, pricing models do not a bid-offer spread make, and Baird illuminates this dark world with the well-crafted sunshine of expertise, mathematical rigor, and experience. In addition, Baird's prose is clean, clear, readable and lean, without glossing over tough spots or ignoring extremes.
   
   Baird's 1993 "Option Market Making" while a bit dated, is becoming recognized as an enduring classic. Not because it is up-to-date with the latest smile dynamics from the research of Avellenada or Rebenato, but because it does what it does very well. Like a classic cookbook such as The Joy of Cooking, this work tells you how to make perfect pot roast, but not the latest slow braised chipolte-rubbed hand-aged hanger steak.
   
   Baird's "Option Market Making", indeed, is an economic anomaly, for it refutes an old chestnut: "those who can't do, teach." In the financial publishing world a book that makes or saves you money should not exist, since the expected return of taking the time and work for authorship is much lower than another economic activity (probably including flipping hamburgers). What motivated Baird? Who knows? But this is pure saved gold here.
   
   Option neophytes should not be misled: this is not a book of "secrets of" that will lead you to quick easy riches in the sometimes wild swings of delta and gamma in options markets. Rather, this is a sober, careful, useful book on the actual difficulty of making a market under uncertainty and rapidly changing information sets. This is a work for practitioners and professionals who want to survive and thrive, not "*just*drive!*" Cowboys and "feelings" punters look elsewhere to scratch your itch.
   
   Standout chapters include "Options Risk" which treats delta, gamma, lambda, theta, kappa/vega, rho, skew, and time spread risks in a clear, although direct and quick, manner. "Position Risk Profiles" covers the meat and potatoes of an options market maker: what is in your book at any one time. This chapter mercifully is not in a "panic mode" tone, but rather carefully and soberly guides you through essentials of risk determination for your entire book.
   
   The chapter "On Strategy" will be helpful for punters and those who have committed some capital to being a market maker, covering delta neutrality (yawn!), but more importantly time spreading, expiration, Fences, and high volatility periods (yeah!). It also treats broker order flow and open interest analysis in a sober way ("saucer bottom" and "reverse hook" technical analysis copter beanies need not apply).
   
   The chapter "Market Making Tactics" is perhaps the most aggressive, but it also patiently spells out what option market makers do on a daily basis. The entry on "common mistakes" alone is worth the price of this volume. Baird closes with a lighter "Observations from the Floor," which it behooves all to read nd revist upon occasion. Having worked in a pit myself, all I can say is "amen Brother, and again I say amen."



5. Just out of curiosity it may be worth skimming through its pages, but the way Mr Baird used to trade in the past (with sheets to get ur position from) is far away from how this is done today. Hence, do not surprise yourself if discussions such as smile delta and smile gamma do not come into play.

3 comments about Options for the Stock Investor: How to Use Options to Enhance and Protect Returns.

1. I recently added "Options for the Stock Investor" to my financial trading and investment library, hoping it would keep its promise describing it as logically written in a systematic and straightforward manner. I'm pleased to say it HASN'T DISAPPOINTED.
   
   Unfortunately, this book hasn't received the attention it deserves among the many books devoted primarily to intermediate options traders/investors. I've always felt that options were explained in a much too "matter of fact" manner, where the most practical information is inadvertently ignored, obscured or non-existent.
   
   Anyone trying to learn stock options is arguably bombarded by fearful information and disorganized, incomplete explanations. This short but concentrated book cuts through the many counterintuitive aspects and implicit contradictions involving stock options.
   
   Beginners need only go to the Investopedia and similar sites on the internet to reinforce the Introduction and supplement their exposure to the language of options.
   
   I've seen some of the worst. This book ranks highly among the best.



2. This book was recommended by an old-timer at Schwab. Worth the price but gives a false impression of how options actually work. Prevailing prices make most spreads, "stock price recovery" schemes worthless. I'm a Newbie, so use Salt.



3. In the past I had lost money virtually every time I ventured into the option's market. Thanks to this book I now understand what I had been doing wrong. It completely opened my eyes. I now understand how the market works. More importantly, I now know how to use options to my advantage. I still don't score a hit every time, but since reading the book I have realized a substantial net profit.

5 comments about A Beginner's Guide to Short-Term Trading: How to Maximize Profits in 3 Days to 3 Weeks.

1. I loved the way this book is written and found it very helpful. The only complaint I have is covering the charts.. the print is too small, and the explanations are very hard to understand as a beginner.. other than that, I really found the book to be very well written and very useful.



2. Great book from start to finish. If you're new to this type of hands-on trading, then this is THE PLACE to start your education. Thorough without getting too deep in the weeds. I'll use this as my reference book.



3. I have read many books on the stock market including the "dummy" books. Toni Turner is so much easier to understand and explains the markets and trading in terms you can understand while teaching you the jargon. It's the jargon that throws people off and makes the market hard to understand if you don't know the usage or terms of "stock market speak". If you've ever wished you had someone to just explain to you in simple terms what the market and trading are all about you have to read this book and any of her other books. The author has lost money and made money and continues to make her living in the markets and we profit from her experiences.



4. I learned so much by reading this book! Normally, I would not have tried it because I do not know enough about trading to try short term trading, plus, I don't want to pay that many commissions. But this book taught me A LOT about reviewing all kinds of stock analysis guidelines, such as what MACD is, what Bollinger bands tell you about a stock's price, OBV (on Balance Volume) and what it tells, etc, etc, etc..... JUST READ IT (twice)!!!!!



5. This is an excellent book for the beginner. I highly recommend this book to the readers before start investing. I am also happy with the seller. Everything was absolutely smooth.

5 comments about Black-Scholes and Beyond: Option Pricing Models.

1. It helps to have courses in calculus and statistics, but all you really need to understand the math in this book is a good grounding in trigonometry (exponentials, logarhythms, and binomial series). My goal was to understand N[d], a.k.a. the area under the normal distribution representing volatility. Not only is this explained well, but I learned much more about the market. Great book!



2. The best book you can buy if you really want to understand Black Scholes and other option pricing models but your're not quite a math wizard. Realistically, to understand these models, you need to understand the fundementals of calculus, statistics and probability, but the author manages to present the material in a way that is understandable without knowing the real heavy math. He glosses over some of the in-depth formal stuff (eg Ito's Lemma), but leaves the reader with at least intuitive sense of where the forumlae come from.



3. Not being mathematically inclined, I had read a number of books over the years to understand equity derivative instruments such as options. Many of the other books out there can be either too mathematical or too "lite". This book provides the tools to clearly understand the underlying mathematics and models.
   Like anything else, it requires some (limited) investment in time but pays this back. A book I recommend above all others to new colleagues.
   Extremely useful for valuing options, including employee options. The introductory mathematical material and binomial model sections are especially valuable. While subject to important assumptions with associated uncertainty, the tools in this books are also helpful in understanding a number of more general corporate finance areas including private equity, venture capital, etc.
   Very highly recommended. Go raibh mile maith aige.



4. I loved the way the author has started from Basic principles on Options and Mathematical concepts. This makes it a good option for newbies.



5. This book was well written. It is easy to understand. I believe that it is especially helpful for anyone who wants to know more about option pricing.

No comments about The Smart Investor's Money Machine: Methods and Strategies to Create Regular Income (Wiley Trading).