Trading Against the Crowd: Profiting from Fear and Greed in Stock, Futures and Options Markets

Trading Against the Crowd: Profiting from Fear and Greed in Stock, Futures, and Options Markets by John F. Summa is a thought-provoking guide that challenges conventional wisdom by showing traders how to profit from contrarian strategies. Instead of following the majority, Summa teaches readers how to recognize the signs of mass psychology—fear, greed, and overconfidence—and use them as signals to trade in the opposite direction.

The book explores the timeless principle that markets often move contrary to the consensus. When the crowd is overly bullish, risks of a downturn rise; when panic and pessimism dominate, opportunities for value often appear. Summa breaks down the dynamics of crowd behavior with clarity, linking investor sentiment to market cycles and highlighting how extremes in positioning often precede turning points.

Going beyond theory, the author provides detailed methods for identifying sentiment indicators, such as put/call ratios, option premiums, volatility levels, and survey data. He demonstrates how to interpret these signals and combine them with technical analysis tools to create trading strategies that are both disciplined and profitable. Special attention is given to the role of options markets, where trader psychology is often most visible, offering contrarians an early look at when the herd may be about to reverse.

Throughout the book, Summa shares practical case studies, historical examples, and actionable insights that illustrate how contrarian trading can be applied across stocks, futures, and options markets. He emphasizes risk control, patience, and the ability to think independently—qualities that are essential for traders seeking to thrive in volatile market conditions.

Trading Against the Crowd stands out for its fusion of behavioral finance, sentiment research, and hands-on trading tactics. It is an essential read for experienced traders, market analysts, and serious students who want to sharpen their understanding of how human psychology shapes price movement and how to capitalize when the majority gets it wrong.

Contents:

• Reflections of a Contrarian on Investor Psychology
• Measuring “Joe Options Trader” Sentiment
• Will the Real Put/Call Ratio Please Stand Up?
• The Options Trading Crowd at Extremes
• Does the Entire Group of Options Traders Get It Wrong?
• OEX Options Traders—Is This a Smart Money Crowd?
• From Statistical Tests to Sentiment Trading System
• Squeeze Play I: Pulling the Price Trigger
• Sentiment Squeeze Play II
• Squeeze Play II and LEAPS Surrogates
• The Tsunami Sentiment Wave Trading System
• Adapting Put/Call Ratios to Bond Futures
• Option Implied Volatility and Investor Sentiment
• Testing Option Volatility on Equity Indices
• Stock Options Volatility and Sentiment Long Waves
• Gauging Crowd Psychology with Short Selling Ratios
• Public Shorts: Still as Good as Ever as Crowd “Sentimeter”
• Trading Against the Advisory Opinion Crowd
• The Fourth Estate Crowd
• Postscript on Crowd Psychology in Financial Markets

Trading Against the Crowd: Profiting from Fear and Greed in Stock, Futures and Options Markets By John F. Summa pdf