Reddit Reddit reviews Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition

We found 17 Reddit comments about Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition. Here are the top ones, ranked by their Reddit score.

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Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition
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17 Reddit comments about Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition:

u/ddak88 · 21 pointsr/wallstreetbets

My friend recommended me this when I first started, but the truth is all the reading in the world isn't going to give you real-world experience. Start small, do your research, thorough research. Learn about greeks, IV, when to take profit, ect. Study the stocks you're interested in and know about, don't worry about trying to follow someone else's trades on a company you know nothing about.

Personally, I started small with 250 and made smart choices to bump it up to 2400 in three weeks, but I got cocky and didn't fully research an investment so I lost 1000 in one trade. If I had kept a level head I would have noticed that there was a significant short interest trying to drive the stock down and the low volume added fuel to the fire. Undervalued or not, hedge funds with billions to throw around can influence the stock price of most companies quite a bit, always be aware of that.

Once you gain some experience and understanding, day trading with the current level of volatility is pretty easy albeit risky at times. Just remember to not gamble with money you can't afford to lose. It may be boring but I keep about 5/6ths of my portfolio in equity that I rarely touch. For every one person you see on this sub that turns 40k into 250k on a MU yolo, there are ten others that turned their 40k into 0k. Be smart and goodluck!

u/burninnchurnin · 16 pointsr/wallstreetbets

Pretty sure someone posted this as a joke, but currently am reading this monster. Probably a bit deep of a read if you are just starting out.

https://www.amazon.com/gp/aw/d/0071818774/

u/Lost_in_Adeles_Rolls · 12 pointsr/wallstreetbets
u/wpawz · 5 pointsr/investing

Two excellent titles on the subject are Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition by Natenberg and Options, Futures, and Other Derivatives (10th Edition) by Hull.

The former is lighter, more entertaining read that is easier on math and touches on applied trading. The latter is a more thorough, academic title.

A number of other helpful resources are available. The Ally Invest Options Playbook provides a handy reference for various option strategies. The Interactive Brokers Probability Lab (free version linked at the bottom of the page) provides a modeling tool to visually explore option strategies by modifying expectations of volatility and price. CBOE offers a complete course on the subject. Finally, Tastytrade offers a long running set of shows, tutorials and discussions covering many aspects of options and option trading.

u/magion · 3 pointsr/wallstreetbets

Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition https://www.amazon.com/dp/0071818774/ref=cm_sw_r_cp_api_i_mm2qDbQRT7CNJ

u/ostrich_effect · 2 pointsr/wallstreetbets

Take that $100 and buy this: https://www.amazon.com/gp/aw/d/0071818774/ref=dp_ob_neva_mobile

Use the remaining $25 for a case of whatever shitty beer people your age drink today. In my youth it was the beast. Not sure that even exists anymore.

u/MistaAJP2 · 2 pointsr/options

Not just about vol trading but the ultimate option bible "Option Volatility and Pricing: Advanced Trading Strategies and Techniques" by Natenberg. Might be a little bit more broad than what you're looking for but this book is phenomenal. Was recommended to me by an option trader at a BB.

https://www.amazon.com/Option-Volatility-Pricing-Strategies-Techniques/dp/0071818774

u/nextlevelyoloswag · 2 pointsr/wallstreetbets
  1. "Closing" is the term that covers both. "Selling" would refer covering a long position, closing a short position would involve buying.

  2. Sort of. Technically the contract is between you and a clearinghouse. The clearinghouse exists to insure liquidity if the counterparty on the other end of the contract fails to meet their obligations. This prevents you from having to worry about who "owns" the other side of your contract.

  3. If liquidity exists there will be people to buy it. With zero volume/open interest you'll have a harder time closing it because you'll need a market. There are ways this can be done (especially for institutional traders or people with DMA), but the simplest answer is if there's no volume or open interest "its complicated". Try not to end up in this scenario.

    You are fundamentally misunderstanding markets in the second part. If every buyer has a seller then the transactions are "closed" and nothing happens at expiration day. If you're left holding the bag on expiration day you'll be forced to take issue of the underlying (in the case of a long) or find the stock to give to the counterparty (in the case of a short).

  4. Yes. With American options you can exercise at any time. Unless you're intended to get a screaming deal on some stock it's usually better to just sell it off.

  5. Options give you the right but not the obligation to the underlying. If it expires ITM you can choose to not exercise. However, in reality most brokers will automatically exercise your options at expiration you so they don't have to ask everyone. So if you cannot afford to exercise you will be margin called and forced to come up with the cash, which as you pointed out will be the difference between the total margin given to you and what you can sell the stock for (plus interest on the margin). I've never had this happen but a broker might do this for you since every broker I've ever dealt with has a "we can sell everything in your account to get our money" clause. They'd rather just sell off your stock + whatever else in your account, take their money, and walk away.

  6. This is options 101. So I'm gonna give you the best book to learn from. Options Volatility and Pricing is the bible of options trading. There are many books, but this book beats "just google it" 10 times over. The material in this is so valuable you can not afford to not have on it on your desk. Read through most of this book before starting to trade options. Additionally, TastyTrade is useful once you've gotten through Options Volatility and Pricing because it deals with far more real world scenarios and gives some legitimately good trading advice. However, they skimp on A LOT of the basics of markets and trading, which Option Volatility and Pricing covers quite well.

u/diemunkiesdie · 2 pointsr/wallstreetbets

The first edition is from 1988, and the Amazon reviews for the second edition say that there are a lot of errors in the new version. How well does the 1988 edition hold up to current trading strategies? Or is there another newer book that you would recommend?

EDIT: Any thoughts on The Rookie's Guide to Options; 2nd edition: The Beginner's Handbook of Trading Equity Options by Mark D Wolfinger? Or Options as a Strategic Investment by Lawrence G. McMillan?

u/justjacobmusic · 1 pointr/investing

> Natenberg's book

The "advanced" one? I noticed there's a "basic" and also a "regular" version.