Customer Reviews

Buying and Selling Volatility

5 star:		(2)
4 star:		(1)
3 star:		(1)
2 star:		(1)
1 star:		(1)

 

 

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 However, one should be strongly cautious on two fronts: 1) the book is now outdated by some years, both in strategies and more sophisticated technological advances (faster and better random number generators, automatic execution, VBA & C++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.

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.

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.

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.

This book is all that one needs to make money in these volatile times. Now that the market is down, I'm making more money in shorting stocks than I was when I was bullish! I also enjoyed the instructions on timing...very simple, yet pure genius.

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