33 of 36 people found the following review helpful:
2.0 out of 5 stars
Not that good - I feel cheated by the reviews, January 28, 2011
This review is from: Trading Options in Turbulent Markets: Master Uncertainty Through Active Volatility Management (Bloomberg Financial) (Hardcover)
I've been trading for several years now (not at a professional level), and make regular profits selling stock options (mostly covered calls and naked puts).
I've bought this book in order to learn new strategies I could use to improve my trading results, but I don't think the book delivers on this.
There are mainly two parts in this book :
- the first options theory, volatility and discussion on the greeks
- the second part describes ten strategies using options
Concerning the theoretical part, it's true that there is no math formula, everything is plain english, but I really don't understand how to use this for my personal trading. For example, there's a discussion about trading "delta neutral" positions, but how can this possibly apply to an amateur ? As far as I know, only market makers are interested in this, because they want to remove the directional risk of their positions.
Concerning the strategies, the relatively "basic" ones are well documented : the covered call, the naked put, the married put, the collar and the straddle/strangle are well treated, the author gives Profit/Loss profiles and the information is sufficient for the reader to know what he/she is doing, although there are some errors (for example page 121 on the table : if you buy 1000 shares @ $28, and sold ten $30 call @ 1.50 ; if the stock is at $40 or $56 at expiration, you will have to sell your shares for $30, netting $2 on the shares, and keeping the $1.5 premium, resulting in a profit of $3500, not $1500).
The rest of the strategies, which are more complex and then need more coverage, are not explained well to my opinion.
The vertical spreads, for example, don't have any Profit/Loss profile ! Maybe the aim of the author was to make his readers think and experiment by themselves, but the main aim when buying a book is to learn quicker.
For the calendar spread, it's the same thing : I really struggled to understand what this strategy was about, until I checked in Guy Cohen's book what it was : it is the equivalent of a covered call, but you replace the long stock with a long call.
For the back spreads and ratio spreads, there is just a call ratio spread P/L profile. If you want to understand what happens to a call back spread that moves against your expectations, you need to do all the research by yourself, or look in another book.
In short, I was disappointed by this book : when reading, I didn't understand how to use the theoretical part in my trading, I already knew the "basic" strategies and learned nothing more, and the more advanced strategies are not explained deeply enough.
Here are some recommandations :
- to learn about options and the greeks in general, look at "Options made easy" by Guy Cohen
- to learn about five real strategies that work, and how to correctly implement them, look at "Get Rich With Options" by Lee Lowel (the title is weird, but the book clearly delivers)
- to have a reference of all the options strategies available, look at "The Bible Of Options Strategies" by Guy Cohen
- to learn how to generate income through selling options, look at the "Complete Guide to Option Selling" by Cordier and Gross (the book only discusses commodity options, but offers practical advice that can be used by equity options traders as well)
- to learn how to make significant amount of money trading stocks and options, look at "Generate thousands etc..." by Samir Elias, although you need to carefully examine the risk of the strategies presented (be careful, you might be completely blown away by this book!)
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18 of 19 people found the following review helpful:
4.0 out of 5 stars
A solid overview for people interested in options trading, September 2, 2010
This review is from: Trading Options in Turbulent Markets: Master Uncertainty Through Active Volatility Management (Bloomberg Financial) (Hardcover)
Larry Shover's "Trading Options in Turbulent Markets" provides an experienced floor-trader's savvy for handling derivatives in a marketplace when most other traders would rather run screaming for the exit. I was at an options trading firm in the fall of 2008, and the market was so chaotic we pulled our quotes for a month and sat back to watch. That's a good way to avoid losing a lot of money, I suppose, but if your goal is to make money it won't help you much.
But it's that marketplace--and making money trading in that marketplace--that Shover has in mind. He carefully explains complex trading concepts for a reasonably astute audience. It helps to have a background in the financial markets for this work but you don't need a degree in calculus or engineering by any means. And the author keeps his writing lively with stories from his own years buying and selling futures and options contracts. But most important, "Trading Options in Turbulent Markets" delivers well on its title. The author details exactly how to handle complex and risky derivatives products in this new era of trading, the post-End of the World, post-Fall 2008 marketplace, where everything is volatile, everything is uncertain, everything is unpredictable.
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