Customer Reviews

Fundamentals of Trading Energy Futures & Options

5 star:		(6)
4 star:		(4)
3 star:		(1)
2 star:		(2)
1 star:		(2)

 

 

The authors present the basics of futures trading in relation to the energy market. The book does not assume any previous familiarity with the commodities.

Unlike many stock market type books, the authors do not suggest or recommend trading in energy futures. The book presents the mechanics of the market and strategies used by traders.

Specific to the energy market are spreads (heating oil vs gasoline, crack spreads, spark spreads, heating oil vs gas-oil spreads, NYMEX vs IPE spreads and frac spreads). All clearly explained and very interesting. Also, hedging strategies including arbitrage and strip hedging are reviewed.

Options on futures are explained in a generic sense (nothing specific to the energy futures) except for crack spread options trading.

Technical analysis is briefly discussed (11 pages in total). The authors are skeptical of technical analysis - at least in a pure form without other information.

The final chapter deals with the economic implications of energy futures to offset potential losses or lock in profits due to changing oil prices.

The book is a good primer on energy futures, and as there are few books available specifically addressing energy futures, I can recommend it.

However, the book is strictly limited to energy commodities. The energy indexes in the equity market (symbols XOI and XNG) and the SPDR options are beyond the scope of the book. There is also no discussion of online information sources and online commodity brokers. Also, there is little discussion of the rewards and risks involved in futures/ options trading. The bibliography is limited to three books.

Although this book is focused on energy futures, the authors provide an outstanding overview of the fundamentals of futures trading. However, the value of the book is its explanation of how energy futures are traded. Technical and fundamentals are reviewed with the emphasis of how they are used in the unique setting of the energy industry. I particularly enjoyed the chapter on the history and growth of the energy contract. The chapter on hedging will be of great intest to those in the energy industry.

This is an excellent and invaluable learning tool. It is helpful to have some financial experience, namely understanding some of the terms like call and put,etc, so that you may spend more time focusing on the concepts, but not absolutely necessary.
The book is logically organized to start with an overview of the futures market,followed by an overview of futures, generalized hedging, and options. All topics are related to energy commodities with easy to understand explanations. Relevant details relating to the energy market (definitions of spark spreads, inter-exchange hedging strategies, etc) are included.
Although I could not go into the market and trade commodities after reading this book, I could understand the overall concept of hedging energy futures and options and this serves as an excellent primer to the next level.
I would say that this book is at about the college senior level, easy on the math and not heavy on modeling. I would recommend it for the beginning MBA student but not at a PHD level.

This is a superb book for anyone who wants to learn more about futures and options, especially with specific examples to energry trading. It is quite easy to read and very understandable for anyone untrained in finance jargon.

If you're looking for a book to teach the basics of trading options and futures, this one might do you. Of course, for that purpose, it's about $50 overpriced. If you're wanting to learn more about the fundamentals of evaluating energy markets, this book really has absolutely nothing to say. Don't be fooled by the title.

The main feature of the book to me was that I understood it! I attempted other books before, and failed. The subject is not hard, but the exposition needs to be clear, and with Errera and Brown it is. I can now read the Gas Daily, and I am ready for the next book on the subject (which is, of course, Hull's "Options, Futures..."). Thanks to the authors for the good book.

The Fundamentals of Trading Energy Futures & Options was one the best business books I've read. It was easy to read and understand. The book is well written and earned its cost in my first hour of trading. I highly recommend this book.

Thanks to the authors for presenting this information in language that is understandable to the masses. You have demystified a topic that is often encrypted.

Many people in the energy business would benefit greatly in their overall understanding by reading this book! It is well-organized and makes the complex business of hedging futures contracts seem logical.

I have worked with wholesale energy traders and seen the trading floor with it's live weather maps, analytical systems, and 100 or so traders and I thought it was an exciting environment. Understanding P/(L) positions, mark to market, and familiarizing with the multitude of hedging strategies has made this intriguing business all the more interesting to me.

The book delivers exactly what its title implies. Thank you, again!

The concepts and trading strategies of futures and options are well explained in plain English. Unfortunately, the author only scatterly discussed some characteristics of the energy industry. To be a successful trader in the energy futures market, you must be an expert in the industry first. However, this might be beyond the scope of the book.

Mr Errera and Mr Brown are drowing a clear picture of energy futures markets. Many complex subjects are turned into a readable and comprehensible form. In my opinion, this book sould be your own book!