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 <stron...