Trading Options for Edge

If you have experience in option trading, or a strong understanding of the options markets, but want to better understand how to trade given certain market conditions, this is the book for you. Many people have some knowledge of trading strategies, but have no idea how to pull it all together. Mark Sebastian's latest book will teach trade evaluation, using Greeks, trading various spreads under different market conditions, portfolio-building, and risk management. Sebastian's approach will help traders understand how to find edge, what kind of trade under what conditions will capture edge, and how to create and successfully hedge to help you build your own personal Goldman Sachs or Merrill Lynch. The book demonstrates how to structure a portfolio of trades that makes more money with less risk. Click here to watch the author's interviews with Fox Business and Nasdaq: http://video.foxbusiness.com/v/5759956686001/ https://youtu.be/dOEJ118vMnA

Auteur

Mark Sebastian is the CIO of Karman Line Capital and founder of Option Pit LLC, and a former member of both the Chicago Board Options Exchange and the American Stock Exchange. He is the author of the trading manual The Option Traders Hedge Fund and a frequent guest on CNBC, Fox Business News, Bloomberg, as well as a contributor to The Street's Real Money Pro. He has been published nationally including on Yahoo Finance, and quoted in the Wall Street Journal, Forbes, Reuters, and Bloomberg. Mark has spoken for the Options Industry Council, CBOE, ISE, CME, and is a co-host on the Option Block podcast and Volatility Views podcast. He has a Bachelor's in Science from Villanova University.

Contenu
Part I: Professional Lessons Every Trader Needs to Know 1 Chapter 1: Trading in Options 3 The TOMIC 4 Build an Infrastructure 5 Build a Trading Plan 6 Select Trades Based on Articulated Criteria 7 Manage Risks 8 Learn All the Essential Elements of Trading 9 Chapter 2: Risk Management 11 The Pricing Model 12 Delta 12 Change in Underlying Price 14 Change in Strike Price 15 Time to Expiration 15 Volatility 16 Gamma 17 Price of the Underlying 19 Strike Price 20 Time to Expiration 20 Volatility 22 Vega 25 Price of the Underlying 25 Strike Price 26 Time to Expiration 27 Volatility 28 Theta 29 Price of the Underlying 29 Strike Price 30 Time to Expiration 33 Chapter 3: Market Makers, Risk, and the Individual Trader 35 How Market Makers Make Money 35 Skew 38 Term Structure 39 Market Maker Size 39 Market Maker Global Risk 41 Chapter 4: Volatility 43 Realized Volatility 43 Zone 1 Ultralow Volatility 43 Zone 2 46 Zone 3 47 Zone 4 50 Implied Volatility 51 Zone 1 52 Zone 2 52 Zone 3 53 Zone 4 54 Chapter 5: What Is Edge? 57 Edge 57 10 Day HV 58 20 Day HV 59 60 Day HV 59 Review the IV of the Product 60 IV30 61 Term Structure 62 Skew 63 Know the Zone of the Market 65 Select the Trade 67 Chapter 6: Locking in Edge 69 The Retail Trader 70 Establish the Option You Want to Execute 70 Establish the Offsetting Contract 71 The Hard and Soft Side of a Trade 71 Execute, Manage, Exit 73 Part II: Using Spreads 75 Chapter 7: A Quick Review of Spreads 77 The Call Spread 77 The Put Spread 79 The Straddle 82 Short Straddle 83 The Strangle 85 The Iron Butterfly 87 The Short Iron Butterfly 87 The Long Iron Butterfly 91 Standard Butterfly 92 The Iron Condor 94 The Short Iron Condor 94 The Calendar Spread 97 The Long Calendar 97 Short Calendar 99 Front and Back Spreads 100 Back Spreads 100 The Front Spread 101 Chapter 8: Adding Edge to Spreads 105 Credit/Debit Spreads 105 Volatility 108 Skew 110 Management 113 A Few Words on Adjusting 115 Chapter 9: Butterflies and Condors 117 The Butterfly 117 Trading a Butterfly 119 Targeting Profit in a Butterfly 124 Condors 124 Strangle 125 IV and HV 126 Skew 128 Set Up and Management 129 Chapter 10: The Front Spread 131 What Is a Front Spread? 131 Creating a Front Spread 132 IV 133 Skew 136 HV 137 The Broken Wing Butterfly 138 Trade Management 139 Aggressive Management 139 Passive Management 139 Beginning of Front Spread in TSLA 140 Target Profit 142 Broken Wing Butterfly Variation 142 Chapter 11: Calendar Spreads 145 Creating a Calendar 146 Evaluate Overall Implied Volatility 147 Evaluate Term Structure 148 Evaluate Event Risk 149 Evaluate Realized Volatility 150 Choose the Right Strikes 151 Execute the Trade 152 Manage the Trade 154 Exit 154 Part III: Gobal Risk 155 Chapter 12: How a Market Maker Trades 157 Market Making 157 The Trader 160 Step 1 161 Step 2 161 Step 3 161 Step 4 162 Chapter 13: Portfolio Greeks 165 Delta 165 Gamma 166 Theta and Vega 167 Theta 167 Vega 168 Managing a Book 172 Chapter 14: Crisis Alpha 175 Defining a Market Crisis 175 Lehman Brothers Bankruptcy 176 VIX Term Structure Determines 'Value' for VIX Derivatives 177 Crisis Alpha Approaches 179 Approach 1: Tactical Long VIX 179 Approach 2: Low Cost-of-Carry Options Structures 182 Exit Strategy 184 Part IV: Appendices 185 Appendix A: Important Terms 187 Historical Volatility (HV) 187 Short-Term Historical Volatility 187 Intermediate-Term Historical Volatility 188 Long-Term Historical Volatility 189 Realized Volatility (RV) 190 Forward Volatility 192 Implied Volatility (IV) 192 Calls and Puts 193 Skew 194 Term Structure 196 Volatility Index (VIX) 197 Delta 198 Gamma 199 Theta 201 Vega 202 Appendix B: Best Blogs 205 Index 207