The New Option Secret – Volatility: The Weapon of the Professional Trader and the Most Important Indicator in Option Trading
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In The New Option Secret – Volatility, option master David Caplan reveals how option volatility accurately indicates market tops Ft bottoms and Signals which option strategy is best to use. Also indicates whether options should be bought or sold and recognizing and increasing returns by selling overvalued options.
Author’s Note:
This book is dedicated to all traders who have decided that there is more to trading than just following a moving average, or a television commentator’s view on the market. It is for those who are seeking a “Trading Edge” over the markets; an advantage over others in this most difficult, but also most rewarding of all professions.
This book is not for the trader who has decided that it looks easy to make money in this “game” and by spending very little time, he can just buy a futures contract in his favorite market and place a “stop loss” for protection. In fact, if you are proficient enough to have successfully done this on a regular basis over many years, we would like to have you trade our own money. This is a book for individuals who are willing to spend the extra time and effort necessary to learn methods that can provide a significant advantage in their trading careers. It is for the hands-on, real-time trader who wants to expand and learn, get an “edge” over others, and do the best he can to succeed in his “bottom-line” goal of making money in the markets.
We will borrow philosophies from other seemingly unrelated fields such as martial arts and gambling. However, our intention is not to be philosophical or to be the “Zen of trading.” It is merely provided to give examples of how new ways of looking at things have worked successfully in other areas. Part philosophy, part experience, part statistics, The Option Secret is different from any book you have read in the past in both its innovative approaches and simplifying methods.
We must reemphasize several caveats that we mentioned in the front of this book. First, there is risk of loss in all trading, no matter how attractive these strategies may seem. We have tried to emphasize the best positions to use and most opportune times to trade; however, even in these situations there is no assurance that trading will be successful or profitable.
Second, the statement, “Past performance is not indicative of future results,” suggests that although a particular strategy may have worked in the past, circumstances change, and there are no assurances of similar results in the future. Finally, as you will see in this book, there are significant benefits when selling options, and therefore many of our strategies will involve selling puts and calls. However, anytime a trader has a short position in an option, there is unlimited risk of loss. Although we present our methods for taming this, this potential still exists and must be taken into account by the trader with both psychological and monetary considerations.
Contents:
- Trading Plan and Special Circumstances
- The Option Secret – Using Option Volatility to Take Advantage of Trading Opportunities
- Step No. 1 — Formulating Your Option Trading Plan
- Money Management When Trading Options
- Using Special Circumstances to Improve Your Odds of Success in Trading
- Special Circumstances by Way of Option Skewing; What it is, Why it Exists, and How to Use it.
- Analyzing Your Option Trading Opportunities
- How Option Volatility Determines Which Option Strategy to Use
- Using The Neutral Option Trading Strategy to Trade Like a “Bookie”
- Using “The Free Trade” to Construct a Large Position
- “The Ratio Option Spread” How it Works and Why It’s One of Our Favorite Trades.
- Using “In-The-Money Options” to Take Advantage of Option Price Disparities
- The “Calendar Spread”
- “No-Cost Option Strategy”
- Monitoring Your Positions and Follow-up Strategies
- An Options Overview
- Types of Volatility
- Technical Explanation of the Use of Vega, Delta, and Theta
- Trading Gems and Tidbits
- Special Articles
- Trading Rules and Articles
The New Option Secret - Volatility: The Weapon of the Professional Trader and the Most Important Indicator in Option Trading By David L. Caplan pdf
| Author(s) | |
|---|---|
| Format | |
| Pages | 249 |
| Publication Year | 1996 |
5 reviews for The New Option Secret – Volatility: The Weapon of the Professional Trader and the Most Important Indicator in Option Trading
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Ariella Maldonado (verified owner) –
This book provides wide spectrum of trading opportunity, while narrow down the focus on a few strategies.
Kaiser Farley (verified owner) –
Mr.Caplan has put a great spin on option investing. If 90% of options expire worthless why buy them, just sell them. This is where this book shines. I have been involved with futures for 11 years. I have been a broker an investor …
In each instance I have avoided options on futures. With Mr.Caplan’s assessment on how volatitlity plays a key role to determining what options to sell and what price to sell them at. I was impressed at how he was able to take a complicated subject and make it easy to read.
His inclusion of articles from various other option traders was great as well.
Wrenley Fleming (verified owner) –
The book matched the details as put up on the listing.
Gives a detailed understanding of what Options are and how to use them to maximize your gains and protect your investments.
Katalina Rush (verified owner) –
The book is very concerned about showing graphics where the defended approach/estrategies have been worked (what doesn’t prove that it is a good strategy in a long run), but forgets to show the risk/reward graphics of the strategies defended.
Not all the advantages defended in the approaches are real advantages or they are discrepancies in volatility very hard to find.
The author don’t stresses the disadvantages of each approach how he should, and described very shortly each approach (about two pages each).
Tree of the six approaches recommended has unlimited risc and even the autor considers a very poor risk management for them, without to consider the possibility of gaps.
For the articles, there are some interesting ones, but they are very repetitive and they often refers to graphs and tables who don’t are present in the book. It sounds like they were put in the book without a criteria, just for give more volume for the book.
Fernando Webb (verified owner) –
This book concentrates on 6 option trading strategies and how best to make profitable trades with them. The 6 stratagies include buying, selling and spreading using options. It deals primarily with the futures markets but much of what is suggested can be adapted to stocks. My 10+ years of trading experience tells me that much of what is written in this book is correct and useful. He also spends time discussing what doesn’t work and why. The importance of volitility is discussed throughout the book. The only problem i have with this book and others like it is that I still don’t know where to look for those volitility numbers. It is a complicated calculation and it changes constantly. Noghing on how to calculate or shere to look it up. Money management is discussed as well as Basic rules all successful traders adhere to. The second half of the book consists of exerpts from other similar books and articles. His main points are hammered home by his repition of them AND also by the words of other respected authors in this field. (Larry Mcmillin for example)
This book is suitable for those with some option knowlege and some trading experience up to very experienced traders. One of the better if not the best book in my trading book collection.