Customer Reviews

Option Volatility Trading Strategies, New and Updated Edition

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first off let me say that "option volatility & pricing" is a masterwork - an essential option trader's read.

but natenberg's latest is a very lightweight volume with little insight for most traders. there is some basic discussion of volatility definitions. however there is not really anything resembling a "trading strategy" discussed in the book unless you consider "buy low, sell high" as a strategy.

to be fair, n. offers no pretense of uncovering any secret strategy for market success. his goal seems to be imparting an understanding of how volatility is the key concept to grasp for determining option prices. he does a nice job of distinguishing between various perspectives on volatility (historical vs. future vs. forecast vs. implied) but ultimately fails to discuss how any of these variables can be incorporated into a trading framework.

at best, the book points readers to look at option prices and values in terms of volatility (again "buy underpriced vol, sell overpriced vol") but leaves it to the reader to make the decision on what is a decent price to pay. this is not much different from saying "your guess is as good as mine." if that's the case (and in many ways i actually believe this to be true), it really makes no difference if you incorporate sophisticated volatility modeling into your trading or just throw darts.

no in depth discussion of commonly experienced trading puzzles like skew, surface, anomalies between expiration periods, and so on. just simple, not-at-all-mathmatical, layman's overview of probability and statistics. many on-line discussion groups offer far more in-depth treatment of volatility trading and it's quirks for free. if you understand "option volatility & pricing" no need to supplement your library with this (even though i've just listed my copy for sale).

Compared to his first book, this one is a joke and makes you wonder whether Natenberg did write it himself. It was way to basic and brief for a serious vol trader and too involved for a beginner. I went through the book in 30 minutes and was extremely disappointed. The book has less than 100 pages of real content, not to mention large font size and double space. A good chunk was spent on talking about very basic concept of expected value and normal distribution. I hope anyone who is interested in trading option would know such things by heart. And the book ends very abruptly. In short, the technical content of the book is thin, not worth $20.

No one has ever questioned that Natenberg literally wrote the book on option volatility and pricing, but I don't think anyone will argue it is not a light read. This new work is immensely more accessible and actually reads light a chat with the author. The professional or highly experienced trader might find it a good refresher at best, but for the newbie or average trader this book is a trove of answers and solid explanations. I haven't tried the tests at the end of the chapters (you can go to Traders' Library to take the online) but it looks like a good idea. The way I see it is this book is like the friend you had who read the instructions for the game Risk so you didn't have to. A great book to have on your shelf.

Congratulations for the delivery service! It was realy very fast, good! Book in very good conditions , like new. The only problem was the book content, I didn't like. Too simple. It's like an introduction for a begginer level student.