The Options Trader’s Workbook: A Problem-Solving Approach Persevere and don’t give up on this book – science-buff – Fremont, CA, USA
to teach using a question-answer approach to the intricacies of options, a major innovation in eye of the book. The problems are interesting and enticing. But eyes are not very careful with the answers he provides in the book. Many questions require the reader some simple high school arithmetic to do, but typically eyes gives you a numerical value as a cryptic answer, so you do not know how the value is derived, or whether you make a mistake somewhere, all that to doArithmetic.
If eyes is only the details of the intermediate steps in a reply, he may be less readers, which were already covered by the challenging issue of the options themselves have lost perplexed. Sometimes he may have even found quite a few unforced errors in his numeric answers.
When I read to page 32, the term "structure of volatility" in italics. It cost me another 46 pages before I found to my horror that my eyes to forget the word italic "," before the word.Page 109 would use 65 instead of 365 days a year for the calculations of time frame. More painful examples are those cases such as that states that a straight line making 45 degrees with the x-axis on a graph (in Page 139), if the angle does not look like 45 degrees at all, and the worst is the x- axis labeled volatility (values from 0 to infinity) and the y-axis is in dollars. You get a whole series of such bizarre sloppy usage and edit or cryptic arithmetic throughout the text. Other typos candownright scary for beginner readers, as Page 138 answer section talking Options 17% are out-of-the-money "when they are actually in-the-money. Or if the put options go mysteriously in the trade # 4 on page 168 to $ 0 at expiry the share price goes below the put strike, and the answer on page 169 describes the trade market as "Ratio Call Spread. It was pure desperation, when I first read – until I figured out where the typo was. The end result of all this is pretty muchunnecessary hardship.
Simple calculation using the probability of normal distribution are found in many parts of the text. But the author forgot to teach normal CDF to a page table for a reader from first principles, as they include the calculation itself, but he keeps referring to Excel built in NORMSDIST () function or mysterious, giving the final probability value without the show, as this is derived – a further unnecessary hardship for the poor readers.
AnotherAmbiguity is the use of 252 vs. 365 days in the volatility arithmetic. I was not knowing what you use for the first occurrence of this problem in Page 25 and 48 and for the next 61 pages left. The suffering ends only on page 109, when the author will usually have the things repeatedly to each use.
Eye leads his term of call premium "price distortion" on page 78 and 79 percentage The upward-sloping curve (Figure 2.3) is the essence of the answer, but their origin remainsmysterious to the reader. In other words, the answer wetted your appetite, but asks you to accept it in faith. You will not be able to answer, even a similar question in the future, because you do not know how.
The answers to frequently more questions and confusion than necessary. On page 80 is a cryptic sentence from the blue – "The short side delivers 37% more time than the true decay cheap alternative." You can spend whole days in order to castigate himself for being so cluelesson how to get to 37%, no matter how carefully you read, and read the answer supplied. Sloppy description would mislead novices impressionable – as Page 162 "The stock is $ 25 out-of the money," the author: the long-term call option in the example, not the stock. Another example is the sentence on page 140, "Volatility changes are advantageous, if the implied volatility is at the head" mispriced. How do you price volatility? Or is the cause volatility implied by the option premiumto get mispriced? Do you think the premium is too high? I do not know.
On page 206, VIX option expiration is to be explained as follows: "VIX options expire on Wednesday that 30-day period immediately before the third Friday of the month after month." If you are confused by the words "before" and "after" in the same sentence, you're not alone. Perhaps the author could explain that the first occurrence of the word "months" have, refers to the SPX option expiration month;the second occurrence of the "Month" refers to the VIX option expiration month. Is there a clearer way of describing? I think so.
Eyes sometimes bypasses the use of simple equations to make things seem less mathematically. But this actually makes the problem solving process less transparent. For example, question No. 6 on page 96 at bottom a question involving high-school-linear equation to solve. But instead of solving only the simple equation that gives a cryptic answer eyes numerical$ 44 in the first sentence of the answer and then goes to justify why these magical numerical value is correct. But more trouble and confusion for the poor readers.
Sometimes the author loses track of its actual definition of terms. For example, in the Calendar Spread section in Chapter 4, the author will define maximum profit at random one or the accounting for a 2-cent-a-day phone call rule out remaining short max profit. You will find that the issue# 16 includes two cents for maximum profit ($ 2.69); Question # 25 includes two cents (max 4530 USD profit on page 145), Page 147 Question # 26 includes two cents (max gain of 1440 U.S. dollars instead of $ 1420 in the table below) ; Question # 29 contains two cents ($ 2.67 $ 2.69 instead of the answer to the Table). The end result is that through an emotional roller coaster ride of oscillating between utter confusion and perfect wisdom every few pages or so to go. Enlightenment is within reach, after long suffering, if you feelIntermittent pattern of the author's amendment of the Rules.
A question-answer book for options to be very specific and clear about what is by arithmetic (and how), What is a rule-of-thumb, and what is pure hand-waiving. The reader will find, unfortunately, vague statements such as page 155's "We can add a small premium (20 cents), for the $ 5.00 rise in the underlying stock price into account." What? Where did those 20 cents from?
Despite all myConcerns about the book, I must say that I pretty much to learn about options – especially because I do not give up after the meeting with a lot of unnecessary hardship. I would suspect that most readers would have after the first chapter or two. Hopefully you did not give up too soon. As for the author, maybe it's time for a second edition. : (
:
“Unlike most books that oversimplify trading situations, Augen’s approach forces you to learn by solving real-world problems where stock prices spike up and down and volatility changes constantly. Learning by doing is a distinct advantage for both novice and expert.”
–Sean Sztern, Alternative Strategies Group, Desjardins Securities
“This workbook represents a unique and effective learning tool. It will broaden your understanding of options and raise your trading skills to a higher level.”
–Dr. W. Edward Olmstead, Northwestern University, author of Options for the Beginner and Beyond
“Serious options trading requires skills that can only be learned through practice. Augen’s progressively more challenging problems definitely provide that real-world practice. There are lessons here for everyone, from beginner to sophisticated professional.”
–James Marcus, Partner, CMG Holdings, LLC
Most options books offer theory and strategies but don’t give you what you really need: hands-on practice that prepares you for real-world trading, where subtle decisions make the difference between winning and losing. Now, there’s a solution: The Option Trader’s Workbook.
Using a question and answer format, this innovative workbook covers key scenarios you’ll encounter as an option trader. Expert trader Jeff Augen explains the challenges they present, reveals the potential pitfalls, and walks you through each example to help you understand how to maximize your success. You’ll master trades designed to profit from rising or falling stock prices, rising or falling volatility, time decay, rapid price spikes, and many other market dynamics. Each section helps you build your skills one trade at a time—whether you’re new to options or you’ve been trading for years.
- Learn by doing–not by reading or memorizing
Practice real decision-making in real trading situations - Gain a detailed, intuitive understanding of pricing
Understand exactly what must happen for your trade to be profitable - Learn to identify efficient trade structures
Avoid errors that cause losses even when you’ve correctly predicted a stock’s direction - Learn how to manage risk effectively
Optimize profits by choosing the right option strategy for a particular situation - Use complex trading strategies with confidence
Master highly profitable techniques used by professionals
The Options Trader’s Workbook: A Problem-Solving Approach
- The Volatility Edge in Options Trading: New Technical Strategies for Investing in Unstable Markets
- Trading Options at Expiration: Strategies and Models for Winning the Endgame
- Day Trading Options: Profiting from Price Distortions in Very Brief Time Frames
- Option Spread Strategies: Trading Up, Down, and Sideways Markets (Bloomberg Professional)
- Trading Option Greeks: How Time, Volatility, and Other Pricing Factors Drive Profit (Bloomberg Professional)
