“Jeff’s analysis is unique, at least among academic derivatives textbooks. I would definitely use this material in my derivatives class, as I believe students would benefit from analyzing the many dimensions of Jeff’s trading strategies. I especially found the material on trading the earnings cycle and discussion of how to insure against price jumps at known events very worthwhile.” —DR. ROBERT JENNINGS, Professor of Finance, Indiana University Kelley School of Business   “This is not just another book about options trading. The author shares a plethora of knowledge based on 20 years of trading experience and study of the financial markets. Jeff explains the myriad of complexities about options in a manner that is insightful and easy to understand. Given the growth in the options and derivatives markets over the past five years, this book is required reading for any serious investor or anyone in the financial service industries.” —MICHAEL P. O’ (more…)

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 examines 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 s (more…)

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 examines 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 s (more…)

Don’t Miss out on Today’s Hottest Trading Arena: Commodity Options! “The authors have written the definitive work on trading commodity options. Their in-depth knowledge of this subject is legendary among industry professionals and expert traders alike, and their ability to relay their knowledge through text, pictures, and the spoken word is unparalleled in our industry.” –Lan Turner, CEO, Gecko Software, Inc. “This book captures the realities of commodity option trading in a simple and easy- to-read presentation that will be beneficial for traders of all sizes and skill levels.” –Chris Jarvis, CFA, CMT, Caprock Risk Management, LLC “Even the most experienced investors often overlook the fact that options on futures are fundamentally different from options on stocks. This book fills that gap and sets the record straight with clear and concise descriptions that are easy to understand. Guaranteed to become a true source of value creation for anyone interested in tradin (more…)

Review

“A must-read for individuals who are serious about trading options” — James Bittman, author, Trading Options as a Professional”Dan’s book is a primer for options aficionados. Without bogging you down with super-heavy math, he walks you through the key principles and shows you what matters the most to your trading portfolio.” — Fari Hamzei, founder, Hamzei Analytics, LLC

Review

“A must-read for individuals who are serious about trading options.”—James Bittman, author, “Trading Options as a Professional”“Dan’s book is a primer for options aficionados. Without bogging you downwith super-heavy math, he walks you through the key principles and shows youwhat matters the most to your trading portfolio.”—Fari Hamzei, founder, Hamzei Analytics, LLC

See all Editorial Reviews
(more…)

Experts are praising High Performance Options Trading From OptionVue™ Systems’ Len Yates “Finally! A book by fellow Boilermaker and option software guru Len Yates! This book is a must-read for anyone interested in a sensibly based, analytical approach to options trading–whether you’re a stock or a future options trader. And the story behind the creation of OptionVue™ is a fascinating bonus.” –Larry McMillan, McMillan Analysis Corp. author of Profit with Options and McMillan on Options “An expert on volatility-based trading, Len Yates applies the same practical approach to this book as he has to his highly regarded software. This is not a technician’s white paper, but a thorough, accessible guide that uses his real-life trading history to fully illustrate how you can succeed in the options markets.” –Jim Bittman, Senior Instructor, CBOE’s Options Institute author of Trading Index Options and Options for the Stock Investor (more…)

Each option has a so called strike price. This is the price at which the option contract has been written. Every option has a whole series of strike prices from which you choose the one you feel is the most appropriate. Most options are written on a monthly basis, so at any one time there will be a series of options spread over several months into the future. Every option is issued with a spread of strike prices from very low to very high. The increment of the strike will vary according to the underlying value of the share. For a low value stock, the increments might be in $1 amounts, but for a higher value stock these could be $5 or $10 steps. The series of options is called an option chain, and each chain will cover several months. Some series are written quarterly and others on a monthly basis.

The strike price is normally presented in the middle column, with calls to the left hand side and puts shown on the right hand side. The first column labeled ‘symbol’ shows the unique code for that particular option. These are unique to the contract, the period and the equity, and can be found on many sites. When trading they normally appear as part of the trade – it is not something you have to remember! The next column is the ‘last’ , which displays the most recent prices which have been bid.

The bid and ask prices are simply the buying and selling prices of the premiums, with the ‘vol’ column showing the number of trades for that particular day. The final column is normally one labelled OI, which is short for ‘Open Interest’. This shows the number of contracts bought or sold and currently waiting for the expiry date.

An option is said to be ‘in the money’ if the strike price is below the market price for a call, and above the market price for a put. For example with a call if the strike price for the option was 500p and the equity was trading in the market at 550p, then this would be 50p in the money. (Remember a call increases in value as the underlying asset increases in price). With a put, this would be in the money for the same strike price if the equity was trading at 450p. These are normally highlighted in the chain to show their status. An option is ‘at the money’ if the strike price and market price are the same.

‘Out of the money’, is simply the reverse of being in the money. For example with a call, if the strike price was 500p and the equity was trading in the market at 450p, then this would be 50p out of the money. An option has intrinsic value if it is in the money and an at the money, or out of the money option, therefore has no intrinsic value.

Each chain will show the underlying equities current market value, along with the associated ticker and the number of days left until expiry.

In order to master options and profit by them as much as possible, you must learn how to to deal with Option Volatility But What is It? Mathematically, it is the square root of the variance. HUH? Sounds confusing, but don’t worry! Once you take this course, you will not only understand it, but you will routinely choose the best option trades for maximum profit.

Volatility in Options Trading is simply the most important aspect when calculating a high probability profit. Volatility can be used in explosive markets and be incredibly profitable in quiet times.

If you trade options, you need to “get” the spreads. In this course we outline their uses, abuses, risks and selection criteria in a simple, straightforward manner.

Learn the differences between Straddles and Strangles. Is a Long Butterfly better than a Short Condor? Perhaps you are not sure which way a stock price will go but expect it to move on earnings should you choose a Vertical Spread or a Calendar Spread (more…)

“Jeff’s analysis is unique, at least among academic derivatives textbooks. I would definitely use this material in my derivatives class, as I believe students would benefit from analyzing the many dimensions of Jeff’s trading strategies. I especially found the material on trading the earnings cycle and discussion of how to insure against price jumps at known events very worthwhile.” –DR. ROBERT JENNINGS, Professor of Finance, Indiana University Kelley School of Business “This is not just another book about options trading. The author shares a plethora of knowledge based on 20 years of trading experience and study of the financial markets. Jeff explains the myriad of complexities about options in a manner that is insightful and easy to understand. Given the growth in the options and derivatives markets over the past five years, this book is required reading for any serious investor or anyone in the financial service industries.” –MICHAEL P. O’HARE, Head of Mergers & (more…)