Customer Reviews

Trading Options in Turbulent Markets: Master Uncertainty Through Active Volatility Management (Bloomberg Financial)

5 star:		(16)
4 star:		(6)
3 star:		(0)
2 star:		(2)
1 star:		(0)

 

 

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!)

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.

I stood in a very active option pit with Larry Shover and was happy to have him there. He was always willing to take the time to explain a complex concept, and even point out a potentially costly error. This book is a natural progression for Larry. The book takes the time to break down the subject and make it accessible and understandable for evryone. From the beginner to the seasoned trading veteran, Larry Shover is there for you. Trading Options in Turbulent Markets is the next best thing to standing next to Larry Shover.

I've been in the option industry for 37 years. I have fallen asleep to many books on options. Some are off the charts expense wise too. This book is the real deal when it comes to active market trading. One should not be on the sidelines during the storm. Risk management is the key to taking advantage during the perfect storms that present themselves from time to time. Like any sport one must have a stratigy in place for what ever play developes. Knowing what your gonna do before the play is key to making money trading options. It's obvious Larry is an experienced trader. I've known many. Make money when you can but always live to trade another day.

This is it! I came into the industry out of college with very little background knowledge of how the options markets worked in practice. I had the benefit of watching Larry Shover in action from afar over several years, and I can tell you from personal experience that the man is a legend and a pure master of his trade (pun intended). Shover's explanations and demonstrations in this book are the best examples of breaking down complicated instruments into digestable and comprehensible teachings. Whether a complete newcomer or a seasoned veteran of puts and calls, this is the one book to get if you are trying to understand how to manage volatility risk and trade options in these turbulent times.

Larry writes knowledgeably about a subject (Volatility) most financial authors only touch on. In fact he is the only author I have found to write meaningfully about option "skew". That alone is worth reading the book. Larry's writing is professional and yet accessible. His knowledge is born of experience and success in the marketplace. This book is a must for any one interested in trading options.

Larry Shover has managed to share his vast experience trading options both on and off the floor in this easy-to-read book. Many of the books claiming to provide the secrets to trading options simply give you definitions of option strategies and lack application. Trading Options in Turbulent Markets is a compilation of Larry's own experiences practicing what he preaches. If you want to learn options from a trader, rather than a professor, this is the book for you.

Have recommended this read to several investor/ trader colleagues, including a few in financial markets who have been hit pretty hard in the last few months and years, leaving them a bit disoriented. The book sings truths that have been forever, yet so many investors and traders don't pay attention. Love how author Shover states things: Chapter 12 sums up what I think, "...in the financial markets there is actually no such thing as a rare event." Touché.

I've known Mr. Shover, and he has a great reputation among traders, but had no idea he was a truly great writer: the introduction blew me away --opened my eyes to the extraordinary economic and financial market events of the last two years, presenting the facts (all of which I actually knew, or thought I did) in a way that just does not come through when you are exposed to the daily news feed and bloviating market commentators. Excellent perspective; loved that. The introduction was actually a bit of a page-turner. It gets heavy fast. Highly recommend as desk-top reference for terms, explanations of trading strategies, stuff I've heard about but don't fully understand or wouldn't be able to articulate without Shover's story-telling and explanations.

BTW, am capital markets professional, traded billions in bonds. This book stands out--in that it's not written by a megalomaniac "I've done it all, and done it all awesomely better than you" financier, but in a self-deprecating, story-telling and sharp, witty manner. No fluff.

Larry Shover clearly speaks with a world of experience at his fingertips. And yet he nervetheless humbly and helpfully illumines the world of seeming complexity that is options trading. Whether you're at an introductory, completely unexperienced level or have years of accomplishments catologued in the world of options, there's more than a little bit the reader can expect to learn from Mr. Shover's text. Definitely recommended.

It doesn't seem possible, but Mr. Shover has written about options trading in a clear, accessible style. His material is well-organized, his charts add clarity and interest, and he is obviously writing from a depth of experience that few can match.