Trading Index Options
$7.81
| Author(s) | |
|---|---|
| Format |
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| Pages |
468 |
| Published Date |
1998 |
Trading Index Options offers tried-and-true techniques without a lot of theory and math. Bittman provides traders with the know-how to evaluate practical situations and manage positions. Among the key features: the basics of index options, including various spreads; how to match strategies with forecasts; alternatives for losing positions; the importance of price behavior and volatility. A windows-based software program that provides multiple option pricing and graphing is included in the package.
Introduction:
If you are an index option trader and you want to improve your skills by learning how to analyze option prices, plan trades, and find new tools that improve the decision-making process, then this book is for you. This book and the accompanying software will:
- Explain option price behavior
- Teach you what you need to know about volatility
- Show you a method for evaluating option prices and selecting the “right” strategy
- Demonstrate a new way of thinking about and using several intermediate and advanced strategies
- Provide a computer program to assist your analysis
- Give you an understanding of trading psychology
For every trade you must (1) state a specific goal, (2) have realistic expectations, (3) plan for several position management alternatives, and (4) keep the principles of trading psychology firmly in mind. Trading Index Options will teach you how to complete these four essential steps every time you trade. This introduction will first explain why index options were created and why they are so attractive to many traders. Second, it will summarize the goals and outline of this book.
Index options and index futures contracts were born out of the tremendous growth and concentration of institutionally managed money. Investment funds range into the hundreds of billions of dollars. Managers of these funds could easily state the problem: How could $10 million, $50 million, or $100 million be invested in or withdrawn from the stock
Contents:
- The Basics of Index Options
- Diagrams of Basic to Advanced Strategies
- Option Values and How They Change
- Pricing and Graphing Strategies with OP-EVAL3TM
- “The Greeks”
- Volatility
- The Importance of Futures Prices
- Trading Strategies
- Buying Options
- Selling Options
- Vertical Spreads
- Straddles and Strangles
- Ratio Spreads
- Time Spreads
- Case Studies
- Alternatives for Managing a Profitable Position
- Alternatives for Managing an Unprofitable Position
- Thinking Like a Trader
Trading Index Options By James B. Bittman pdf
4 reviews for Trading Index Options
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Nevaeh Payne (verified owner) –
The book is too old for the software to be of any use but as an experienced trader who is moving from equity to index options I found the index options-specific information in the book to be very valuable.
For instance, it was the only material I’ve found that shows how the normally “safe” strategy of debit spreads can be VERY risky when used with index options.
I also liked, very much, the chapters that illustrate the various management strategies for both winning and losing trades, including how to cut your losses on a trade that’s gone against you.
The complaints about not being able to contact the author are totally lame. He has educational Webcast videos on the CBOE Web site and his e-mail address is on the slides. I’ve e-mailed him several times with questions and have always gotten an in-depth response.
Based on the recommendation of another trader I’m getting his “Trading as a Professional” book next.
Ricky Stein (verified owner) –
Like others I have noted that the software doesn’t work anymore that comes with the book. Also, I can’t understand why they sell a kindle version, when the software obviously would not be provided. I could not find the author’s e-mail address so I could not request an alternate software program.
Ariya Fernandez (verified owner) –
I found the software extremely helpful and working properly. The book, while discussing indexes, speaks to all equity and index options. I made the costly mistake of paying for the Windows version of Option Master Software through the z-shops and could kick myself daily for that error.
The software that comes with the book is basic Black & Sholes calculations but unlike Option Master, it offers comparative capabilities and graphing and costs 60%-80% less depending on whether you’re a windows or mac user
While the text is basic, it is encyclopedic compared with the Option Master’s redundant and pitiful effort. Unfortunately, Bittman’s book should come with some technical support or a supporting website. But all in all, this is a pretty good primer.
Rhys Flowers (verified owner) –
Although a bit outdated, this book provides some timeless information on option pricing, volatility and trading strategies. The qualitative discussion of the “The Greeks” is the one of the best I have read. If you want a deeper more quantitative understanding of them, read Hull and work the problems and end of each chapter (assuming that you can solve the Black-Scholes equation for each of its variables and remember enough calculus to calculate the equation’s first and second derivatives). Having read and studied Hull’s tome, I can appreciate how well Bittman explains the Greeks without dumbing them down.
The copy that I read, which I got from the library, did not include the CD that contains options pricing and strategy graphing software (OP-EVAL3). Other reviewers did not think much of this software and judging from the software’s output, which is shown in the book, I believe that you can get at least as much information from most option trading platforms (e.g., Think or Swim, Option Vue, Option Express, or Trade Station Option Pro).
On the downside, Bittman barely discusses the advantages of trading index options as opposed to options on equities or futures. However, from the title of the book, “Trading Index Options”, I expected more. Also his example trades were so similar that I soon grew tired of reading them. They all used options that were within thirty day of expiration with strikes that were slightly in the money, at the money, and slightly out of the money. For example, the Deltas on long calls ranged from about .3 to .7. Bittman never explains why he chose to use options with similar strikes and expirations to assess the risks/rewards of trading strategies that are very different (i.e., debit and credit spreads, strangles, straddles, and single options).
Although outdated, this book would benefit beginners and reinforce the skills of advanced traders. Moreover, it motivated me to buy Hull’s 2008 publication, Trading Options as a Professional: Techniques for Market Makers and Experienced Traders.