DESCRIPTION

(From The Jacket) - Successful trading, in general, is difficult and options specifically can be complicated. In most cases, those who do well have an ability to focus on good processes and let the results take care of themselves.

Nobody is more familiar with this situation than professional trader and quantitative analyst Euan Sinclair. In "Option Trading", he's broken down the process into the parts you need to thrive — an understanding of market structure, knowledge of the instruments you trade, a way to capture an edge, and a methodology for managing risk.

Written with the serious trader in mind, this comprehensive guide opens by exploring options, both historically and conceptually, and then uses the no-arbitrage principle to introduce option pricing — examining both static arbitrage relationships and the dynamic hedging approach. With this critical background in hand, the largest and most substantial part of the book addresses how to actually trade options.

Along the way, you'll gain an in-depth understanding of:

• The various option strategies that can be implemented, from puts and calls to strangles, straddles, and butterflies
• How to measure and forecast realized volatility, the nature and behavior of implied volatility, and what it takes to successfully trade the two
• The concept of expected value, the general idea of hedging, and the importance of trade sizing
• The strategies behind market making
• The essential aspects of risk management in option trading
• And much more

Option trading is an important part of the financial landscape. This book will show you how to make the most of these profitable products, no matter what the market does.

TABLE OF CONTENTS

• Chapter 1 - History
• Chapter 2 - Introduction To Options
• Chapter 3 - Arbitrage Bounds For Option Prices
• Chapter 4 - Pricing Models
• Chapter 5 - The Solution Of The Black-Scholes-Merton (BSM) Equation
• Chapter 6 - Option Strategies
• Chapter 7 - Volatility Estimation
• Chapter 8 - Implied Volatility
• Chapter 9 - General Principles Of Trading And Hedging
• Chapter 10 - Market Making Techniques
• Chapter 11 - Volatility Trading
• Chapter 12 - Expiration Trading
• Chapter 13 - Risk Management