The Market Taker’s Edge: Insider Strategies from the Options Trading Floor
$17.86
| Author(s) | |
|---|---|
| Format |
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| Pages |
256 |
| Published Date |
2011 |
With The Market Taker’s Edge, Passarelli shares the knowledge and insights other floor traders keep tight to their chests―the knowledge you need to beat the market on a regular basis. This market maker turned market taker delivers a focused commentary on key concepts for operating in the options exchange like a pro. He offers a candid look at the ups and downs of his trading career and conveys the lessons he learned along the way in an informative and often entertaining way. After spending time on the floor in his shoes, you’ll understand:
- How professional traders attempt to make money―and why it’s different from the way you make money
- Why market makers are not the enemy
- How both market takers and market makers can profit while taking opposite sides of the same trade
- How to focus on what is important in a trade and avoid the noise
Dan Passarelli has already taught thousands of people how to make a living as traders, and now with The Market Taker’s Edge, he can help you do it, too. What I like about Dan’s book is that it’s obvious he isn’t just telling you how to trade, he’s telling you how he trades. There’s always a big difference between those who teach trading from an academic standpoint and those who have traded and have the ability to walk investors step by step through the trade. For my money, I always seek advice and counsel from those that walk the walk and Dan Passarelli has walked the walk.
Contents:
- MY FIRST YEAR IN THE OPTIONS BUSINESS
- THE DIFFERENCE BETWEEN ME AND YOU
- SPREADING RISK
- AN OPTION BY ANY OTHER NAME
- THE ZEN OF TRADING AND HOPING TO NEVER GET A REAL JOB
- KNOW YOUR ENEMY
- USING WHAT YOU KNOW ABOUT MARKET MAKERS TO YOUR ADVANTAGE
- THE SHIFT OF POWER
- SYNTHETICS AND THE PROFESSIONAL TRADERS’ INDIFFERENCE BETWEEN PUTS AND CAL
- EXPIRATION TRADING
- LIVING ON THE EDGE
- VOLATILITY AND STRADDLES
- ARBITRAGE AND NICHE TRADING
- MONITORING OPTIONS PORTFOLIO RISK
- THE SYMBIOTIC RELATIONSHIP BETWEEN THE MAKERS AND THE TAKERS
- PLAYING THE NUMBERS
- STORIES, SAYINGS, AND ADVENTURES FROM THE EPICENTER OF THE OPTIONS UNIVERSE
The Market Taker's Edge: Insider Strategies from the Options Trading Floor By Dan Passarelli pdf
14 reviews for The Market Taker’s Edge: Insider Strategies from the Options Trading Floor
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Khari Sullivan (verified owner) –
Different to most finance and trading books with no arcane theory but lots of explanations of experiences as a market maker. Great insights into the otherside of those trades. The discussion of volatility and all the Greeks particularly helpful.
London Choi (verified owner) –
Most option books focus on the details and structure of specific option strategies – replete with graphs showing risk and reward. Dan’s book goes beyond the blue print of setting up a specific strategy. He focuses on what happens after the trade. The nuggets of knowledge interspersed through his narrative provide the basis for developing a trading discipline. I have spent over 25 years as an options trader – on and off floor. These lessons can be the difference which makes the difference. Also read Dan’s book, “Trading Option Greeks: How Time, Volatility, and Other Pricing Factors Drive Profit.”
Jose Salinas (verified owner) –
This is a pretty eclectic book that covers many topics that should appeal to most beginners and intermediate option traders. Just be mindful of what you are getting versus what you might be looking for as this is not a book for the advanced trader or geared towards certain strategies. Although there is some detailed discussion on some advanced topics for the non-beginners such as delta hedging and gamma scalping. If you consider yourself a beginning or intermediate options trader, then from one trader to another I believe the purchase price is more than justified. There are always pearls of wisdom to be gained from someone with more years of experience than you, and understanding the market from the perspective of a former professional market maker should be essential if you want to take your retail trading seriously. There are never any secrets or magic bullets to profitability, but there is information contained in this book that you most likely didn’t previously know and should make you a better trader. There were a few moments of clarity for me that explained some things I had seen in my trading past but didn’t quite understand until now. Learning option trading via the Internet as a retail trader and never having been involved at the professional market maker level leaves you either under or misinformed. This books helps bridge that gap and sheds light on some subject matters that should absolutely help make you a better trader. I only recently learned this myself the hard way over the last few years. Ch’s 7-9 in particular can literally save you hundreds to thousands of dollars depending on what kind of volume you trade. I’ve ready pretty much everything out there related to options related trading, and this is definitely a new unique piece and worth the read for the right audience.
Augustine Contreras (verified owner) –
A useful book if you are a market maker.
Jack Payne (verified owner) –
Disappointing, I loved “Trading Option Greeks”, which I thought everyone trading options should read. In this book, there was nothing new. Willing to even settle for some folklore on the trading floor was not entertaining. And those trading pits are gone anyway. There was not much more knowledge in this book. If you don t have “Trading Option Greeks”, get it. Otherwise, pass.
Dane Beasley (verified owner) –
Great book justvwhat I want to know about the options pit.
He has great insight and experience to help traders prosper
Melanie McFarland (verified owner) –
This is a good book. Something can be learned by everyone from an experienced market maker. A few gems here and there and reinforcement of things you already knew.
Francesca Sexton (verified owner) –
I was given this book as a gift. I was glad to get it as I had read his other book “Trading the Greeks”. I wish I had read this book before getting into options. First before other books I have read on options. Dan Passarelli presents the other side. In the book he presents the other side that of the Market Maker, the person on the other side of the retail trader. In one of my classes while getting a degree in finance one of my professors had discussed the role of the “specialists” on the floor of the NY Stock Exchange. The market makers provide the liquidity that we retail traders need to invest/trade. He discusses some of the interesting phenomemona such as the pinning of stock on expiration Friday at the strike price by explaining the need of market makers to go home that Friday evening with their books flat (no position in the stock or its options) because of the possibility of binary event over the weekend which would leave them with a large profit or loss. Rather they want to make money from the bid ask spread. Once a retail trader (you and I) know how they think then we can fashion a trade profitable to us but one they are likely to pick up rather than leave on the table. They wish to trade delta neutral; they like positions that are profitable to them no matter which way the stock goes. But most retail traders have a definite forecast and that forecast makes them delta positive or negative. But a retail trader can use some of their ideas. A stock can go up a lot, a little, side ways,down a little or down a lot. A Market Taker (you and I) can learn from them how to profit on 4 of the 5 possibilities. Mr. Passareilli presents a story of a trader (probably not him) who made his firm $275,000 on a single trade in a single day, based on a carefully crafted trade based on technical analysis. You and I would be quite pleased, but not his bosses because his trade was not delta neutral. Rather than being pleased, his boss was livid.
For me investing and options are not a zero sum game. very good traders/investors come to the market with different needs and therefore different strategies. The manager of a large pension plan might use options as an insurance policy, he is trying to reduce his risk to a binary event, a black swan that is going to crap over everything. But another believes the company has good prospects and has a different strategy. One sells and the other buys. Think of it as a chess game with two very good players, each looks at the board and each comes up with a different strategy.
Once you read this book you will want to go on and read more books. read the ones that get good reviews. Some will teach the academic side of the the market, other will teach you how to find a company to study and maybe invest in. Others will teach you how to calculate the fair value of a company by discounted cash flow.Still others will teach how to spot phony earning reports. Still others will help to fashion a strategy to meet your forecast. Investing your’s and other’s hard earned cash is a serious business. We as investors have a responsibility to ourselves and to the economy to invest wisely. Capital is stored up labor. So if you are just starting out read this book or if an intermediate do the same. Read other books. Avoid the ones that tell you the short cut to the promised land. Paper trade; paper trade some more. Then read this book once again. Then you might be ready to take on the market.
Royalty Kaur (verified owner) –
This book is good if you’re interested in learning how the market is viewed from a market maker perspective. The book also gets into some detail regarding option greeks and option strategies. Recommend reading if you’re interested in getting a feel for what the author’s pit trading days were like and to understand some of the basic definitions of greeks and some strategy overview.
Jaylah Spencer (verified owner) –
I had checked the book out from my local library before I purchased. Well worth the money and has already paid back the cost of the book
Having insight and knowledge into how the guy on the other side of your trade, the Market Maker, thinks and acts greatly has increased the profitability of my trades. Thanks Dan
Lyric Page (verified owner) –
I was quite disappointed in this book. I expected much more from Passarelli, and much more from this book. But I found myself flipping through the pages looking for anything that an experienced trader might find insightful or useful. I found nothing. If you know absolutely nothing about options trading, or have never traded, then this book might be helpful. If you like to listen to old traders tell you war stories and relive their glory days, then you might be entertained. If you are looking for a book that will give you trading ideas, you will find nothing in this book. Frankly, any information in this book that is of any value you can easily find for free all over the internet. Money down the drain.
Ace Huang (verified owner) –
Reasonably well written, relatively clear discussion of stock options for a beginner. This topic is much more involved than it may seem at first glance and Passarelli’s first priority is to pass his considerable knowledge to his students and readers. I have read his other book, Trading Option Greeks, as well.
Cataleya Sanders (verified owner) –
Most books about market making and options theory could be boring at times. As a portfolio manager who runs a family office and trade “liquid alpha strategies” in Asia, I find this book written by Dan Passarelli an enjoyable read. I like Dan’s story telling style, which makes this book even more interesting. Honestly, I am not looking to find any trading ideas from this book (most professional traders will have their own game plan), but more from his market experience about his earlier days as a veteran trader/ educator. Dan achieves this purpose. I recommend Dan’s book with enthusiasm. Edward Chin, Hedge Fund Manager based in Asia.
Daniela Lee (verified owner) –
So glad I bought this book and read it!!! I learned an incredible account about Market Makers and why the markets move as they do. Helped my trading quite a bit. Highly recommend!