Customer Reviews

The Bible of Options Strategies: The Definitive Guide for Practical Trading Strategies

5 star:		(44)
4 star:		(8)
3 star:		(7)
2 star:		(1)
1 star:		(3)

 

 

Guy Cohen lays out just about every option strategy that you could make work, given the right market conditions and your tolerance for risk. I would certainly put this book in the "Reference Book" category -- something that you would take out on occasion to answer a query about how a certain trade is placed or when it's a good strategy to use.

I started out with the intent of reading it from cover to cover. But I have to admit that I ended up skipping a lot of the material after reading the first 100 pages or so because it gets somewhat repetitious. So this indeed makes a good reference book, say, when you hear someone mention a "Long Put Condor" and wonder what it is. Or if you forget what market conditions (volatile, neutral, etc) would be required for a Bear Call Spread to work well. Also, I do appreciate Guy's organization of strategies by Risk/Reward, Direction, Volatility, etc. That makes it easy to get a short list of strategies given your own trading style and the market conditions.

What I found missing that I wish was there is information like how far from Option Expiry should this strategy be placed, what is an optimum range of IV for the underlying stock for each type of strategy, when should the strategy be repaired or exited? How do you repair it, or leg in or out successfully?

Also, I still do not understand what the little charts mean at the end of each strategy. I understand that they represent some kind of profile for each of the greeks, but there's no scale or indicators on the axes, nor can I find an explanation of what the dotted, dashed and solid lines mean. Maybe it's just me, since I've only been trading options for about a year now. If you're an experienced option trader, you'll probably know what they mean.

Options trader Guy Cohen has captured the beauty of options as a flexible trading vehicle with this book.

He reduces more than 60 options strategies strategy into five key areas:

1. Income strategies
2. Volatility strategies
3. Sideways market strategies
4. Leveraged strategies
5. Synthetic strategies.

Even the newest trader will find his insightful explanations of the most complex strategies clear and concise. This would be the book to have by your side if you were looking for a definitive guide to contemporary options trading if it were not so poorly edited. The mistakes distract from what would be a masterpiece on options trading.

This hardcover should not be your first reading about options. It assumes that you are already familiar with options trading, and just want a reference book at hand.

For each strategy, e.g. "Short Iron Butterfly", there is a description, context (outlook, rationale, net position, effect of time decay, appropriate time period to trade, ways of selecting the stock and options), risk profile, Greeks, advantages and disadvantages, ways of exiting the trade, and an example.

However, the ways to select an option are not always adequately covered. For example, in the "short (naked) put" strategy, the author simply writes "Give yourself as little time to be wrong". The concept of Annualized Premium is not covered, there is no method given to select the best option from different strike prices and expiration dates. If you are interested in this technique, you can find it in "Options as a Strategic Investment" by Lawrence McMillan, chapter 19, or there is a special book "Using Options to Buy Stocks" by Dennis Eisen.

You may keep this book as a quick reference, but if you didn't read anything about options yet, I have some recommendations. If you are not quite familiar with the stock market, I would suggest "The Options Course" by George Fontanills and Richard Cawood. If you did buy stocks already, then skim through Trading Options For Dummies by George A. Fontanills; or Options Made Easy by the same author as of the reviewed book.

This book is an outstanding resource for both bginners and novices. There are so may examples and strategies that it is clearly a true resource that will be used over and over again. This book has the unique ability of TEACHNG the beginners the risks, rewards, and "How To's" which I wish all the books I have purchased had provided. My copy is now two years old and looks like an old rag because of the references I use it for. If anyone is thinking of trading oprions, this book should be required reading.

Don't spend your time looking for a better tool. This one will have 90% of the answers you will need to understand option strategies, terms, and risk reward charting.

What I really liked about this book is that it's almost interactive. You can literally dip in to any strategy and find out what it's all about in seconds. There are 7 different tables of contents so you can find any strategy by chapter, by your level of experience, by market direction, by volatility, by risk/reward payoff, and by type (income or capital gain). This makes the book incredibly easy to navigate whether you're a beginner or reasonably experienced, particularly as around 60 strategies are covered.

Every strategy is constructed in modular format which means once you've done one you'll be able to navigate any of the others with easy familiarity.

The graphics are phenomenal - I've never seen the Greeks explained so elegantly and succinctly - and I find myself using this as a reference book over and over again.

This definitely is a reference book - though some may like to read it cover-to-cover, for me the main value has been in dipping in in out.

A no-nonsense, no-introductory-material reference library of option strategies. Cross-referenced by goal, risk tolerance, strategy type, name, and more. Herein one easily can find each strategy described with its theoretical outcomes, its benefits, and its drawbacks. Order entry and exit procedures and Greeks also accompany each strategy.

For an introduction to options investing, see the author's prior book.

This is an ideal reference book for just about every options strategy I could ever think of. Compared with other options texts I have read, this definitely comes under the heading of "Reference Books". I can imagine that this must have been a very ambitious project as every effort has been made to make the book user-friendly and as interactive as a book could possibly be. By this I specifically mean the layout, the liberal use of diagrams (especially good for explaining the Greeks) and even the use of the simple (and sometimes humorous) icons (the stages of evolution are used for each strategy's level of appropriateness for your level of trading experience - the monkey icon for beginners I found amusing!).

At the end there is a chapter on taxation for options traders, which gives a useful introduction to that particular minefield - at least I understand now why my accountant charges me so much for my annual trading audit!

All in all a great book that gets to the point and gave me exactly what I wanted, and therefore highly recommended.

I have bought 2 of Cohen's book. The Options made Easy and this. There are so many type of strategies but we only use a handful of them in our daily trading. My favors strategies are Long Call Spread, Long Put Spread, Covered Call, Protective Put and Long Condor as well as Buttery.

I read lots of article which is freely available in the Internet. All of them showed you how to enter a trade. But none of them is as complete as these 2 books. So much so about when to enter, how to create the strategies, the B/E point, the Greeks symbols and etc. But none of them show you enough how to exit a trade step by step in different scenarios! Yeah, including these 2 books as well.

For example in the Sideways Strategies. All I see are these "With This Strategy, you can simply unravel the spread by buying back the options you sold and selling the options you bought in the first place" or "Advanced traders may leg up and down or only partially unravel the spread as the underlying asset fluctuates up and down. In this way, the trader will be taking smaller incremental progits before the expiration of the trade"

I would prefer example a Long Call Condor with multiple scenarios :
ABCD is trading at $52.87 on May 17, 2004
Buy the June 2004 45 Strike call for $8.52
Sell the June 2004 50 Strike call at $4.82
Sell the June 2004 55 Strike call at 2.34
Buy the June 2004 60 Strike call for $0.98

Scenario A) If the underlying is trading at $53.80 at expiration I am getting my profit as planned. Should I wait till the position expire on the expiration date? Or should I close the 45/50 before expiration and let the 55/60 expire worthless? Or unravel the position just before the expiration? Show me the best option to get my max profit!

Scenario B) If the underlying is trading at $49.30 with 7 days to expire. Should I close the entire spread. Or should I close 1 and let the other expire worthless to mitigate my losses and hope it will move into profit for my remaining spread/leg.

Scenario C) If the underlying is trading at $56.20 with 7 days to expire. Should I close the entire spread. Or should I close 1 and let the other expire worthless to mitigate my losses and hope the price for the underlying will fall/up will mitigate loss with my remaining spread/leg.

It's obviously lot of scenarios and how the individual trader deal with the trades. But with different scenario provided with example, we can learn and create our own style of trading.

Everyone know how, when to jump in, but forget how, when, to exit to harness or mitigate your profit or losses. Well this book just not enough for you if you are intermediate and hope to be expert especially on the advance strategies.

The layout of these 2 books is much better and easy for the eyes compare to "Option Volatility & Pricing" from Sheldon Natenberg.

I have several books on options, but this is the one book that I keep on using. Most option books spend too much time on how to price an option. Unless you are active in thinly traded options, the market will dictate the current market price. This book gets right into why you are interested in options. Each option situation is broken down so anybody with a basic understanding will understand. For each situation, he discusses the Greeks (the new hip way of talking about options), risks, pros and cons, as well as an example. The only subject this book seems to fall short is what to do when your position is not going your way and how to minimize your loss.

I have a coworker that is interested in options and this was the only book I suggested he read.

This is a heavy duty options book but don't let this scare you off. The only prerequisite I would say you need is some basic options understanding/experience and you also need to be interested in learning more about options strategies. When I first got this book I thought "Wow! This reminds me of some of my economics text books from college." But I soon found this book to be well organized and chocked full of great information and far more interesting than any college text book.

I have to warn people that this is not a book to teach you the fundamentals of options trading. You need to have learned the basics already.

I won't go into all the details of what this book covers since many other posts have done that. But I do want to say I really like this book. It has now taken up permanent residence on my desk because I use it so much.