The Option Trader's Workbook: A Problem Solving Approach and over one million other books are available for Amazon Kindle. Learn more

Buy New

or
Sign in to turn on 1-Click ordering.
or
Amazon Prime Free Trial required. Sign up when you check out. Learn More
Buy Used
Used - Very Good See details
$15.95 & eligible for FREE Super Saver Shipping on orders over $25. Details
Fulfilled by Amazon

or
Sign in to turn on 1-Click ordering.
 
   
Sell Back Your Copy
For a $0.75 Gift Card
Trade in
More Buying Choices
Have one to sell? Sell yours here
The Options Trader's Workbook: A Problem-Solving Approach
 
 
See all product images
See 1 customer image
Share your own customer images
Search inside this book
Start reading The Option Trader's Workbook: A Problem Solving Approach on your Kindle in under a minute.

Don't have a Kindle? Get your Kindle here, or download a FREE Kindle Reading App.

The Options Trader's Workbook: A Problem-Solving Approach [Paperback]

Jeff Augen (Author)
3.6 out of 5 stars  See all reviews (21 customer reviews) |
List Price: $34.99
Price: $22.97 & eligible for FREE Super Saver Shipping on orders over $25. Details
You Save: $12.02 (34%)
  Special Offers Available
o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o
In Stock.
Ships from and sold by Amazon.com. Gift-wrap available.
Only 4 left in stock--order soon (more on the way).
Want it delivered Monday, May 21? Choose One-Day Shipping at checkout. Details
Textbook Student FREE Two-Day Shipping for students on millions of items. Learn more

Formats

 Amazon Price New from Used from
Kindle Edition $15.39   -- --
Paperback $20.99   -- --
Paperback, December 14, 2008 $22.97   -- --
There is a newer edition of this item:
The Option Trader's Workbook: A Problem-Solving Approach (2nd Edition) The Option Trader's Workbook: A Problem-Solving Approach (2nd Edition) 3.6 out of 5 stars (21)
$20.99
In Stock.

Book Description

Publication Date: December 14, 2008 | ISBN-10: 0137148100 | ISBN-13: 978-0137148103 | Edition: 1

“Unlike most books that oversimplify trading situations, Augen’s approach forces you to learn by solving real-world problems where stock prices spike up and down and volatility changes constantly. Learning by doing is a distinct advantage for both novice and expert.”

--Sean Sztern, Alternative Strategies Group, Desjardins Securities

 

“This workbook represents a unique and effective learning tool. It will broaden your understanding of options and raise your trading skills to a higher level.”

--Dr. W. Edward Olmstead, Northwestern University, author of Options for the Beginner and Beyond

 

“Serious options trading requires skills that can only be learned through practice. Augen’s progressively more challenging problems definitely provide that real-world practice. There are lessons here for everyone, from beginner to sophisticated professional.”

--James Marcus, Partner, CMG Holdings, LLC

 

Most options books offer theory and strategies but don’t give you what you really need: hands-on practice that prepares you for real-world trading, where subtle decisions make the difference between winning and losing. Now, there’s a solution: The Option Trader’s Workbook.

 

Using a question and answer format, this innovative workbook covers key scenarios you’ll encounter as an option trader. Expert trader Jeff Augen explains the challenges they present, reveals the potential pitfalls, and walks you through each example to help you understand how to maximize your success. You’ll master trades designed to profit from rising or falling stock prices, rising or falling volatility, time decay, rapid price spikes, and many other market dynamics. Each section helps you build your skills one trade at a time---whether you’re new to options or you’ve been trading for years.

  • Learn by doing--not by reading or memorizing
    Practice real decision-making in real trading situations
  • Gain a detailed, intuitive understanding of pricing
    Understand exactly what must happen for your trade to be profitable
  • Learn to identify efficient trade structures
    Avoid errors that cause losses even when you’ve correctly predicted a stock’s direction
  • Learn how to manage risk effectively
    Optimize profits by choosing the right option strategy for a particular situation
  • Use complex trading strategies with confidence
    Master highly profitable techniques used by professionals

 

Special Offers and Product Promotions

  • Buy $50 in qualifying physical textbooks, get $2 in Amazon MP3 Credit. Here's how (restrictions apply)

Frequently Bought Together

The Options Trader's Workbook: A Problem-Solving Approach + The Volatility Edge in Options Trading: New Technical Strategies for Investing in Unstable Markets + Trading Options at Expiration: Strategies and Models for Winning the Endgame
Price For All Three: $77.08

Show availability and shipping details

Buy the selected items together

Editorial Reviews

From the Back Cover

“The one thing readers should understand is that Jeff Augen is truly dedicated to educating traders at all levels. Instead of handing out answers, Jeff wants to make sure they understand the concepts he is teaching. He recognizes the value of being able to apply basic knowledge to new situations. Adapting and building on techniques and strategies has made Jeff Augen successful.”
--Michelle Gebhardt, Executive Editor, Stocks, Futures, and Options magazine

 

There’s only one way to become a great option trader: practice. This up-to-the-minute workbook gives you all the hands-on practice you need to become a consistently profitable option trader...without risking a dime! Jeff Augen walks you through every type of trade, showing you exactly how to execute maximum-profit strategies and avoid disastrous trading pitfalls. You’ll start with the basics and then build your skills to master today’s most powerful new strategies. Use this book to perfect your option trading instincts--so when real money’s on the line, you’ll win!

 

Just some of what’s new in this edition:

  • Using precisely tuned ratio trades to profit in virtually any environment
  • Structuring income-generating trades with well-defined risk profiles
  • Capitalizing on trades containing both stocks and options
  • Mastering the unique dynamics of CBOE weekly options expiration trades
  • Using VIX options to take advantage of unusual volatility arbitrage situations
--This text refers to an alternate Paperback edition.

About the Author

Jeff Augen, currently a private investor and writer, has spent more than a decade building a unique intellectual property portfolio of databases, algorithms, and associated software for technical analysis of derivatives prices. His work, which includes more than a million lines of computer code, is particularly focused on the identification of subtle anomalies and price distortions.

 

As a cofounding executive of IBM’s Life Sciences Computing business, he defined a growth strategy that resulted in $1.2 billion of new revenue and managed a large portfolio of venture capital investments. From 2002-2005, he was President/CEO of TurboWorx, a software company founded by the chairman of the Department of Computer Science at Yale University. He is the author of two previous books: The Volatility Edge in Options Trading (FT Press 2008) and Bioinformatics in the Post-Genomic Era (Addison-Wesley 2005).

See all Editorial Reviews

Product Details

  • Paperback: 240 pages
  • Publisher: FT Press; 1 edition (December 14, 2008)
  • Language: English
  • ISBN-10: 0137148100
  • ISBN-13: 978-0137148103
  • Product Dimensions: 9.1 x 6.9 x 0.9 inches
  • Shipping Weight: 15.2 ounces (View shipping rates and policies)
  • Average Customer Review: 3.6 out of 5 stars  See all reviews (21 customer reviews)
  • Amazon Best Sellers Rank: #596,852 in Books (See Top 100 in Books)

    •  Would you like to update product info or give feedback on images?

More About the Author

› Visit Amazon's Jeffrey Augen Page
Jeffrey Augen
Jeff Augen, currently a private investor and writer, has spent more than a decade building a unique intellectual property portfolio of algorithms and software for technical analysis of derivatives prices. His work includes more than one million lines of computer code reflecting powerful new strategies for trading equity, index, and futures options.

Augen has a 25-year history in information technology. As a co-founding executive of IBM's Life Sciences Computing business, he defined a growth strategy that resulted in $1.2 billion of new revenue, and he managed a large portfolio of venture capital investments. From 2002 to 2005, Augen was President and CEO of TurboWorx, Inc., a technical computing software company founded by the chairman of the Department of Computer Science at Yale University. He is author of The Volatility Edge in Options Trading (FT Press, 2008), The Option Trader's Workbook (FT Press, 2008), Trading Options at Expirations (FT Press, 2009), Day Trading Options (FT Press, 2009), and Bioinformatics in the Post-Genomic Era (Addison-Wesley, 2004). Much of his current work on options pricing is built on algorithms for predicting molecular structures that he developed as a graduate student.

Customer Reviews

Most Helpful Customer Reviews
52 of 55 people found the following review helpful
Format:Paperback|Amazon Verified Purchase
Using a question/answer approach to teach the intricacies of options is a great innovation in Augen's book. The problems posed are interesting and tantalizing. But Augen is not very careful with the answers he provides in the book. Many of the questions require the reader to do some simple high-school arithmetic but Augen typically gives you a cryptic numerical value as answer, leaving you clueless as to how the value is derived, or whether you make a mistake somewhere doing all that arithmetic.

If Augen only provides the details of the intermediate steps in an answer, he may have lost less readers who were already perplexed by the challenging topic of options itself. Sometimes he may even have found quite a few preventable errors in his numerical answers.

When I read Page 32, the term "structure of volatility" was italicized. It took me another 46 pages before I found to my horror that Augen forgot to italicize the word "term" in front of the phrase. Page 109 would use 65 instead 365 days in a year for timeframe calculations. More grievous examples include such cases like stating that a straight line makes 45 degrees with the x-axis on a graph (in Page 139) when the angle doesn't look like 45 degrees at all, and worst, the x-axis is labeled volatility (values ranging from 0 to infinity) and the y-axis is in dollars. You get quite a few of such strange usage and sloppy editing, or cryptic arithmetic throughout the text. Other typos can be downright scary for novice readers, like Page 138's answer section talking about options that are "17% out-of-the-money" when actually they are in-the-money. Or when the put options in trade #4 on Page 168 mysteriously going to $0 at expiration when stock price goes below the put strikes; and the answer on Page 169 describes the put trade as "ratio call spread". It was pure despair when I first read it - before I figured out where the typo was. The end result of all these is quite a bit of unnecessary hardship.

Simple probability calculations using the Normal Distribution are found in many places of the text. But the author forgot to include a one-page Normal CDF table to teach a reader from first principles how to do the calculation himself; instead he keeps referring to Excel's built-in NORMSDIST() function or mysteriously quoting the final probability value without showing how this is derived - another unnecessary hardship for the poor reader.

Another ambiguity involves the use of 252 vs 365 days in volatility arithmetic. I was left without knowing which one to use from the first appearance of this issue in Page 25 and 48 and for the next 61 pages. The suffering only ends on Page 109 when the author gives you a rule about what occasions to use each.

Augen introduces his term of call premium "price distortion" percentage on Page 78 and 79. The upward-sloping curve (Figure 2.3) is the gist of the answer but its derivation remains mysterious to the reader. In other words, the answer wets your appetite but asks you to accept it on faith. You won't be able to answer a similar question yourself in the future because you don't know how.

The answers frequently generate more questions and confusion than necessary. Like on page 80, you find a cryptic sentence out of the blue - "The short side returns 37% more time decay than the correctly priced option." You can spend days chastising yourself for being so clueless about how to get to 37% no matter how careful you read and re-read the answer provided. Sloppy description would lead impressionable novices astray - like Page 162's "the stock is $25 out-of-the-money"; the author means the long-call option in the example, not the stock. Another example is the sentence on Page 140, "volatility changes are beneficial only if implied volatility is mispriced to the upside". How do you price volatility? Or is this about implied volatility causing the option premium to get mispriced? Do you mean the premium is too high? I don't know.

On Page 206, VIX option expiration is explained this way: "VIX options expire on the Wednesday that is 30 days prior to the third Friday of the month immediately following the expiration month." If you are confused by the words "prior" and "following" in the same sentence, you are not alone. Maybe the author could have stated that the first occurrence of the word "month" refers to the SPX option expiration month; the second occurrence of "month" refers to the VIX option expiration month. Is there a clearer way of describing this? I think so.

Augen sometimes bypasses the use of simple equations to make things appear less mathematical. But doing so actually makes the problem solving process more opaque. For example, Question #6 on Page 96 is basically a question involving high-school linear equation solving. But instead of just solving the simple equation, Augen gives a cryptic numerical answer of $44 in the very first sentence of the answer and then goes on to justify why this magical numerical value is correct. Yet more hardship and bewilderment for the poor reader.

At times, the author loses track of his actual definition of technical terms. For example, in the calendar spread section in Chapter 4, the author would define max profit to randomly include or exclude the accounting of a 2-cent 1-day-remaining short call in max profit calculation. You will find that Question #16 excludes 2 cents for max profit ($2.69); Question #25 includes 2 cents (max profit $4530 on Page 145); Page 147 Question #26 excludes 2 cents (max profit of $1440 instead of $1420 in the table); Question #29 includes 2 cents ($2.67 instead of $2.69 in the answer's table). The end result is you go through an emotional roller-coaster ride of oscillating between utter confusion and perfect wisdom every few pages or so. Enlightenment is only within reach after much suffering when you sense a pattern of the author's intermittent change of rules.

A question/answer book for options needs to be very specific and clear about what is being calculated through arithmetic (and how), what is a rule-of-thumb, and what is pure hand-waiving. Readers will unfortunately find fuzzy statements like Page 155's "We can add a small premium (20 cents) to account for the $5.00 increase in the underlying stock price." What? Where did this 20 cents come from?

Despite all my misgivings about the book, I must say that I did learn quite a bit about options - mostly because I did not give up after encountering much unnecessary hardship. I would guess that most readers would have after the first chapter or two. Hopefully you don't give up too early. As for the author, maybe it's time for a second edition. :(
Was this review helpful to you?
18 of 19 people found the following review helpful
Excellent Book December 11, 2009
Format:Paperback
I am not giving this book 5 stars because it is the next "War and Peace" or because it is an easy and fun reading experience. I am giving it 5 stars because it is very difficult to comprehend, the concepts require professional diligence and because it is unlikely that many persons will be able to master the material - exactly like the options markets. If readers are serious about entering the high-risk options trading arena it is better to get an introduction into the difficulty that they will face rather than reading the overly optimistic hype that most trading advertisers teach.

When option products were introduced in the 1970's they became an esoteric venue where there were not too many traders involved and there was much less understanding of the mechanics of the strategy. It was relatively easy to trade (even though there were much thinner markets at that time) and to generate profitable outcomes.

Trading today has become an extremely completive game with electronic information transfer, great numbers of products and strategies and world-wide participation by intelligent, intense, serious traders. Option trading has become extremely sophisticated and is really not a place for tepid speculation. This book was written with the demand of an investment of time and energy to master the concepts. It is not written for casual investors or those who are not serious about understanding complex strategies. In other words, it is not written for traders who lack the characteristics to become successful at option trading.

The book does a very good job of describing the theories and uses of option strategies. But where it is especially valuable is that it requires very close attention to the details of each trade to fully understand the factors that govern profitability. The whole spirit of the book is directed toward the focus upon and mastery of the discipline required to become profitable at a very serious, completive business. This book is an especially good challenge to test how dedicated the trader is to becoming successful.
Comment | 
Was this review helpful to you?
18 of 20 people found the following review helpful
Format:Paperback
The workbook is like having an experienced options trader as a personal mentor. Augen guides you through the process of evaluating options positions, adjusting options positions, and then taking them off. Readers who actually work their way through the scenarios presented, before looking at the answers, will more fully benefit from this book. This book takes the trader through many of the same issues presented in The Volatility Edge but adds much new material and new insights that could not be fully presented in the previous book's textbook format. Instead those issues are better shown in a question and answer format as in this workbook. I really learned a lot from this workbook and you can too!
Comment | 
Was this review helpful to you?
Most Recent Customer Reviews
Not for a novice but so much information
I had hoped that this book would help me understand options better but I was overwhelmed. Perhaps if I stick with it and get some "outside" training, I will make use of this book. Read more
Published 29 days ago by Ursula
Advanced material, for sure
If you have a solid grasp of the basics of options (the difference between put and call, covered and naked, what a strike price is, the meaning of "OTM", etc. Read more
Published 2 months ago by Eric C. Sedensky
sophisticated
This book contains much more depth on options than 95% of the books I've read on the subject. It does not spend a lot of time giving you basic information almost all options... Read more
Published 3 months ago by Arod
Probably not the road to financial success
The theory of options trading is the ultimate application of mathematics to finance- as close as quantitative analysis and application comes to removing the "market" from economic... Read more
Published 4 months ago by Joseph Devita
A much-to-be-desired second edition
While the first edition served as a good revision material for serious traders, the second edition doesn't address some of the improvement opportunities nor does it add... Read more
Published 4 months ago by Sreeram Ramakrishnan
A good resource for developing some practical options know-how
Workbook is the key term in the title of this book. It is a basically a collection of problem-solving exercises. Read more
Published 4 months ago by John Forman
I wish I had this book earlier
Boy, I wish I had this book earlier before I blew all my money. I made a lot of mistakes trading options and if I had this book I would of avoided losing so much money. Read more
Published 6 months ago by J. Garton
For Option Traders
I have no experience trading options so I couldn't make heads nor tails of The Options Traders' Workbook. Read more
Published 7 months ago by L. Samuelson
Great for a dedicated options trader; not for the novice or faint of...
Do not buy this as your first book in options trading. There is little in the way of frilly examples, pretty payout graphs, or even tables. Read more
Published 7 months ago by Lars Bergstrom
Good for some purposes, not for others
This book is generally clear and reasonably accurate. It walks readers through a series of problems in option pricing and strategies. Read more
Published 7 months ago by Aaron C. Brown
Search Customer Reviews
Only search this product's reviews
Front Cover | Table of Contents | First Pages | Index | Back Cover | Surprise Me!
Search Inside This Book:
Inside This Book (learn more)
Key Phrases - Statistically Improbable Phrases (SIPs): (learn more)
max gain, short call strike, delta neutral point, complex multipart trades, profit from time decay, relevant pricing information, original long position, underlying stock trading, expiration profile, entire timeframe, maximum potential gain, maximum potential profit, underlying stock rises, deviation price change, maximum profit point, bearish nature, expiration cycle, expiration price, net delta, calendar spread, expiration approaches, maximum potential loss, implied volatility, volatility skew, strike price
Key Phrases - Capitalized Phrases (CAPs): (learn more)
Remaining Price, Delta Contr, Stock Days Contr, Volatility Delta, Call Days Call, Position Price, Delta Volatility Contr, Days Remaining Timeframes, Stock Contr, Stock Days Put Price, Stock Put Days Put Price, Delta Rem, Position Strike, Call Price, Net Stock, Long Call Strike, Volatility Strike, Trade Open Close, Position Position Stock, Days Timeframes, Net Long, Remaining Volatility Theta Price, Net Loss Long, Final Call, Position Profit
Browse Sample Pages:
Front Cover | Table of Contents | First Pages | Index | Back Cover | Surprise Me!
Search Inside This Book:

Tags Customers Associate with This Product

 (What's this?)
Click on a tag to find related items, discussions, and people.
 
(2)
(1)
(1)
Agree with these tags?
See all 4 tags...

Your tags: Add your first tag
 
See most popular tags

Customer Discussions

This product's forum
Discussion Replies Latest Post
No discussions yet

Ask questions, Share opinions, Gain insight
Start a new discussion
Topic:
First post:
Prompts for sign-in
 


Active discussions in related forums
Search Customer Discussions
Search all Amazon discussions
   
Related forums


Look for Similar Items by Category

Look for Similar Items by Subject

Search Books by subject:















i.e., each book must be in subject 1 AND subject 2 AND ...