Option Volatility and Pricing: Advanced Trading Strategies and Techniques

Features

• Cover Type: Hard Cover with 470 pages
• Published by: McGraw-Hill
• Edition: 2nd Edition August 1, 1994
• Written in: English
• ISBN 10 Number: 155738486X
• ISBN 13 Number: 978-1557384867
• Book Dimensions: 9 x 6.1 x 1.4 inches
• Weighs: 1.8 pounds

Product Description


One of the most widely read books among active option traders around the world, Option Volatility & Pricing has been completely updated to reflect the most current developments and trends in option products and trading strategies.

Featuring:

• Pricing models
• Volatility considerations
• Basic and advanced trading strategies
• Risk management techniques
• And more!

Written in a clear, easy-to-understand fashion, Option Volatility & Pricing points out the key concepts essential to successful trading. Drawing on his experience as a professional trader, author Sheldon Natenberg looks at both the theory and reality of option trading. He presents the foundations of option theory explaining how this theory can be used to identify and exploit trading opportunities. Option Volatility & Pricing teaches you to use a wide variety of trading strategies and shows you how to select the strategy that best fits your view of market conditions and individual risk tolerance.

New sections include:

• Expanded coverage of stock option
• Strategies for stock index futures and options
• A broader, more in-depth discussion volatility
• Analysis of volatility skews
• Intermarket spreading with options

About The Author
McGraw-Hill authors represent the leading experts in their fields and are dedicated to improving the lives, careers, and interests of readers worldwide

Reader Reviews
If you trade options, you will quickly learn that it is essential to understand the concept of volatility. Natenberg explains the concept of volatility in great detail, and shows how this concept applies to different option positions. Natenberg not only takes great pains to explain the concept of volatility, in addition to other inputs into an option pricing model, but clearly shows that option pricing isn't the exact science many seem to believe, for the simple reason that we never know if our volatility estimate is correct. I suspect many traders just don't understand the severe limitations current models have in different situations (ie. how the Black-Scholes model underprices options near expiration). For the mathematically inclined, there are ample formulas and equations in the appendix. Read it, study it, and apply the concepts to develop your own trading system.