{"product_id":"trading-options-in-turbulent-markets-isbn-9781118343548","title":"Trading Options in Turbulent Markets","description":"\u003cb\u003eTop options expert Larry Shover returns to discuss how to interpret, and profit from, market volatility\u003c\/b\u003e  \u003cp\u003e\u003ci\u003eTrading Options in Turbulent Markets, Second Edition\u003c\/i\u003e skillfully explains the intricacies of options volatility and shows you how to use options to cope, and profit from, market turbulence. Throughout this new edition, options expert Larry Shover reveals how to use historical volatility to predict future volatility for a security and addresses how you can utilize that knowledge to make better trading decisions.\u003c\/p\u003e \u003cp\u003eAlong the way, he also defines the so-called Greeks—delta, vega, theta, and gamma—and explains what drives their values and their relationship to historic and implied volatility. Shover then provides effective strategies for trading options contracts in uncertain times, addressing the decision-making process and how to trade objectively in the face of unpredictable and irrational market moves.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eIncludes a new chapter of the VIX, more advanced material on volatility suitable for institutional or intermediate options trader, and additional volatility-based strategies\u003c\/li\u003e \u003cli\u003eAnswers complex questions such as: How does a trader know when to tolerate risk and How does a successful trader respond to adversity?\u003c\/li\u003e \u003cli\u003eProvides a different perspective on a variety of options strategies, including covered calls, naked and married puts, collars, straddles, vertical spreads, calendar spreads, butterflies, condors, and more\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eAs volatility becomes a greater focus of traders and investors, \u003ci\u003eTrading Options in Turbulent Markets, Second Edition\u003c\/i\u003e will become an important resource for in-depth insights, practical advice, and profitable strategies.\u003c\/p\u003e \u003cp\u003ePreface xiii\u003c\/p\u003e \u003cp\u003eAcknowledgments xv\u003c\/p\u003e \u003cp\u003eIntroduction xvii\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart I: Understanding the Relationship Between Market Turbulence and Option Volatility 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 Managing Risk and Uncertainty with Options 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Is Risk? 4\u003c\/p\u003e \u003cp\u003eWhat Is Uncertainty? 4\u003c\/p\u003e \u003cp\u003eSeven Lessons Learned from Market Volatility 5\u003c\/p\u003e \u003cp\u003eUnderstanding Derivatives 7\u003c\/p\u003e \u003cp\u003eThe Six Benefits of Options 9\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 Making Sense of Volatility in Options Trading 13\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eVolatility as an Asset Class 14\u003c\/p\u003e \u003cp\u003eAnalyzing Volatility with Implied Volatility 16\u003c\/p\u003e \u003cp\u003eWhat Does Implied Volatility Reveal? 16\u003c\/p\u003e \u003cp\u003eMaking Trading Decisions Based on the Disparity between Historical and Implied Volatility 17\u003c\/p\u003e \u003cp\u003eAppreciating Volatility for All It Is Worth 19\u003c\/p\u003e \u003cp\u003eHow Volatility Really Works on the Trading Floor 20\u003c\/p\u003e \u003cp\u003eVolatility and Uncertainty: Lessons for the Irrational Option Trader 21\u003c\/p\u003e \u003cp\u003eVarieties of Option Volatility Trading 23\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Working with Volatility to Make Investment Decisions 25\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOn Predicting the Future 25\u003c\/p\u003e \u003cp\u003eStarting with Historical Volatility 27\u003c\/p\u003e \u003cp\u003eImplied Volatility 32\u003c\/p\u003e \u003cp\u003eWhy Do Volatilities Increase as Equities Fall? 35\u003c\/p\u003e \u003cp\u003eImplied versus Historical Volatility 36\u003c\/p\u003e \u003cp\u003eJustification for the Disparity between Historical and Implied Volatility 37\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Volatility Skew: Smile or Smirk? 39\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eConsidering Some Examples 40\u003c\/p\u003e \u003cp\u003eA Primer on Random Walk and Normal Distribution 41\u003c\/p\u003e \u003cp\u003eDealing with the Higher Moments of the Normal Distribution 45\u003c\/p\u003e \u003cp\u003eSkew Is High, Skew Is Low. So What? 47\u003c\/p\u003e \u003cp\u003eDoes a “Flat” or “Steep” Skew Predict the Future? 48\u003c\/p\u003e \u003cp\u003eA Fair Warning about Thinking about Skew too Much 49\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Fixated on Volatility and the VIX: What Is Volatility, Anyhow? 51\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat We (Think) We Know 52\u003c\/p\u003e \u003cp\u003eDefinitions of VIX 54\u003c\/p\u003e \u003cp\u003eGrasping the VIX Index 54\u003c\/p\u003e \u003cp\u003eVIX—A (Very) Brief History 55\u003c\/p\u003e \u003cp\u003eVIX: Calculation and Interpretation with a Simple Calculator 56\u003c\/p\u003e \u003cp\u003eImportant Insights on the VIX Index 57\u003c\/p\u003e \u003cp\u003eWhat Does the VIX Tell Us? 58\u003c\/p\u003e \u003cp\u003eVIX and Perhaps the Biggest Misnomer of All! 59\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart II: Understanding Option Volatility and Its Relationship to Option Greeks, Personal Decision Making, and Odds Creation 61\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Extreme Volatility and Option Delta 63\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Misnomer of Delta and Probability of Exercise 63\u003c\/p\u003e \u003cp\u003eDelta Defined 65\u003c\/p\u003e \u003cp\u003eThe Relationship Between Volatility and Delta 69\u003c\/p\u003e \u003cp\u003eHigher Volatility and Delta 70\u003c\/p\u003e \u003cp\u003eLower Volatility and Delta 70\u003c\/p\u003e \u003cp\u003eDelta, Time, and Volatility 71\u003c\/p\u003e \u003cp\u003eDelta, Position Delta, Volatility, and the Professional Trader 72\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Smoke and Mirrors: Managing Gamma through Volatile Markets 75\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eGamma and Volatility 78\u003c\/p\u003e \u003cp\u003eManaging Positive Gamma during a High-Volatility Environment 79\u003c\/p\u003e \u003cp\u003eThe Bad News: There’s Always More than Meets the Eye 80\u003c\/p\u003e \u003cp\u003ePractical Considerations for Managing Long Gamma in a High-Volatility Environment 81\u003c\/p\u003e \u003cp\u003eManaging Negative Gamma in a High-Volatility Environment 82\u003c\/p\u003e \u003cp\u003ePractical Considerations of Negative Gamma in High Volatility 84\u003c\/p\u003e \u003cp\u003eGamma and Volatility with Respect to Time Structure 85\u003c\/p\u003e \u003cp\u003eSummary 86\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Price Explosion: Volatility and Option Vega 87\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Relationship between Implied Volatility and Vega 88\u003c\/p\u003e \u003cp\u003eImplied Volatility: Price Analogy 90\u003c\/p\u003e \u003cp\u003eOption Vega and Time 90\u003c\/p\u003e \u003cp\u003eOption Vega and Its Greek Cousins 91\u003c\/p\u003e \u003cp\u003eOption Vega Implications 91\u003c\/p\u003e \u003cp\u003eDon’t Underestimate the Relationship between Volatility and Option Vega 91\u003c\/p\u003e \u003cp\u003eVolatility and Vega Insensitivity 93\u003c\/p\u003e \u003cp\u003eImportant Concepts When Applying Option Vega in a Volatile Marketplace 94\u003c\/p\u003e \u003cp\u003eSummary 97\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Sand in the Hourglass: Volatility and Option Theta 99\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBalancing Time Decay with Volatility: Mistakes Traders Make 101\u003c\/p\u003e \u003cp\u003eVolatility and Theta: What Every Investor Needs to Know 106\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 The Nuances of Volatility: Interpreting the mix of Academics and the Study of Volatility 109\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Complication Surrounding Vega Risk in an Option Position 110\u003c\/p\u003e \u003cp\u003eImplied Volatility Skew + Term Structure = Volatility Surface 111\u003c\/p\u003e \u003cp\u003eImplied Volatility Term Structure 114\u003c\/p\u003e \u003cp\u003eDid You Know Your Volatility Has Volatility? 115\u003c\/p\u003e \u003cp\u003eThe Normal Value of Volatility 117\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart III: Ten Proven Strategies To Employ In Uncertain Times 119\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 Preparing for Trading Using Volatility Strategies 121\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Elements of a Sound Trading Decision 122\u003c\/p\u003e \u003cp\u003eDeveloping an Approach to Options Trading 123\u003c\/p\u003e \u003cp\u003eThe Mind of a Successful Trader 126\u003c\/p\u003e \u003cp\u003eDecision Making, Options versus Everything Else 128\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 The Buy-Write, or the Covered Call 131\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Buy-Write (Covered Call) Defined 131\u003c\/p\u003e \u003cp\u003eAn Example of the Covered Call Strategy 132\u003c\/p\u003e \u003cp\u003eThe Theory and Reality of the Covered Call 133\u003c\/p\u003e \u003cp\u003eCovered Call Writing and Implied Volatility 137\u003c\/p\u003e \u003cp\u003eImplied Volatility in Practice 138\u003c\/p\u003e \u003cp\u003eManaging Contracts in a Time of High Volatility or a Falling Market 142\u003c\/p\u003e \u003cp\u003eEffective Call Writing in a Volatile Market 143\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 Covering the Naked Put 145\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eContemplating the Cash-Secured Put 147\u003c\/p\u003e \u003cp\u003eUtilizing the Cash-Secured Put in a High-Volatility Environment 149\u003c\/p\u003e \u003cp\u003eCash-Secured Put and Volatility: Risks and Consequences 152\u003c\/p\u003e \u003cp\u003eIncome Strategy: Volatility as an Asset Class and Cash-Secured Puts 154\u003c\/p\u003e \u003cp\u003ePosition Management 155\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14 The Married Put: Protecting Your Profit 157\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eVolatility, Downside Risk, and the Case for Portfolio Insurance 157\u003c\/p\u003e \u003cp\u003eWhy Buy High Volatility? 158\u003c\/p\u003e \u003cp\u003eThe Married Put 159\u003c\/p\u003e \u003cp\u003eHow and When to Use a Married Put 161\u003c\/p\u003e \u003cp\u003eExample of When to Use a Married Put 162\u003c\/p\u003e \u003cp\u003eThe Married Put: Limiting Loss, Neutralizing Volatility, and Unleashing Upside Potential 165\u003c\/p\u003e \u003cp\u003eMarried Put: A Real-Life Illustration 166\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15 The Collar: Sleep at Night 169\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCollar Strategy 169\u003c\/p\u003e \u003cp\u003eTypes of Collars 173\u003c\/p\u003e \u003cp\u003eSummary 177\u003c\/p\u003e \u003cp\u003eConclusions on the Collar Strategy 181\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16 The Straddle and Strangle: The Risks and Rewards of Volatility-Sensitive Strategies 187\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Buying or Selling of Premium 188\u003c\/p\u003e \u003cp\u003eProperties of Straddles and Strangles 188\u003c\/p\u003e \u003cp\u003eComparing Straddles and Strangles 189\u003c\/p\u003e \u003cp\u003eHow to Compare Historical and Implied Volatility 192\u003c\/p\u003e \u003cp\u003eThe Impact of Correlation and Implied Volatility Skew 193\u003c\/p\u003e \u003cp\u003eAn Alternative to the Naked Volatility Sale via the Straddle\/Strangle: The Strangle Swap 194\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17 The Vertical Spread and Volatility 201\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntroduction to the Vertical Spread 202\u003c\/p\u003e \u003cp\u003eA Trader’s Reasoning for Trading a Vertical Spread 203\u003c\/p\u003e \u003cp\u003eDesigning Your Vertical Spread 205\u003c\/p\u003e \u003cp\u003eVertical Spreads and Greek Exposure 208\u003c\/p\u003e \u003cp\u003eVertical Spreads as a Pure Volatility Play 211\u003c\/p\u003e \u003cp\u003eComparing Volatility’s Effect on Vertical Spreads 212\u003c\/p\u003e \u003cp\u003eSummary: Comparing Vertical Spreads and Implied Volatility 213\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 18 Calendar Spreads: Trading Theta and Vega 217\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCalendar Spreading—Trading Time 218\u003c\/p\u003e \u003cp\u003eRisks and Rewards of the Calendar Spread 219\u003c\/p\u003e \u003cp\u003eA Calendar Spread with a Bullish Expectation 220\u003c\/p\u003e \u003cp\u003eConsiderations and Observations for Calendar Spreads and Volatility 222\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 19 Ratio Spreading: Trading Objectives Tailor Made 227\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eHow Back Spreads and Ratio Spreads Work 227\u003c\/p\u003e \u003cp\u003eBack Spreads 229\u003c\/p\u003e \u003cp\u003eRatio Spreads 231\u003c\/p\u003e \u003cp\u003eGreek Values and the Back Spread or Ratio Spread 232\u003c\/p\u003e \u003cp\u003eConfiguring and Pricing a Back Spread or Ratio Spread 236\u003c\/p\u003e \u003cp\u003eReconciling Volatility and the Back Spread or Ratio Spread 238\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 20 The Butterfly Spread 241\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSetting up a Butterfly 241\u003c\/p\u003e \u003cp\u003eThe Butterfly Spread as a Volatility Investment 245\u003c\/p\u003e \u003cp\u003eGreek Values and the Butterfly 247\u003c\/p\u003e \u003cp\u003eStructuring and Pricing a Butterfly 250\u003c\/p\u003e \u003cp\u003eTrading Butterflies in a Volatile Market 250\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 21 Wingspreads 253\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCapturing Convergence and Divergence 253\u003c\/p\u003e \u003cp\u003eWingspreads: Risk\/Reward 254\u003c\/p\u003e \u003cp\u003eWingspreads: Sensitivities 254\u003c\/p\u003e \u003cp\u003eWingspreads and the Greeks 255\u003c\/p\u003e \u003cp\u003eWingspreads: Various and Sundry Details 257\u003c\/p\u003e \u003cp\u003eThe Condor Spread 258\u003c\/p\u003e \u003cp\u003eConclusion 267\u003c\/p\u003e \u003cp\u003eAbout the Author 269\u003c\/p\u003e \u003cp\u003eIndex 271\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eLARRY SHOVER\u003c\/b\u003e has been a firm and proprietary options trader for more than twenty-five years and can be seen on networks such as Bloomberg, BNN, CNBC, CNN, FOX Business, Phoenix Television, and SKY. He is currently Chief Investment Officer and Portfolio Manager to Solutions Funds Group, Inc., a managed futures mutual fund. A large portion of his career has been dedicated to developing his own proprietary trading firm, and he has also served as director of education and senior vice president of trading at several commodities and options firms. Shover was a member of the CME and the Chicago Board Options Exchange (CBOE) and holds several Financial Industry Regulatory Authority (FINRA) licenses. He is also the author of the first edition of this title, published by Wiley.   \u003c\/p\u003e\u003cp\u003e\u003cb\u003eWhile we continue to emerge\u003c\/b\u003e from the rubble of the 2008 financial disaster, traders and investors still find themselves struggling to deal with markets and an economy besieged by uncertainty. Nobody understands this situation better than options expert Larry Shover. That's why he has returned with the \u003ci\u003eSecond Edition\u003c\/i\u003e of \u003ci\u003eTrading Options in Turbulent Markets.\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003eUpdated to reflect current conditions—which may prevail for longer than anyone has expected—this book will help you think about options trading in terms of our modern world of randomness and volatility. \t\u003c\/p\u003e\u003cp\u003eDivided into three comprehensive parts, Part One of this expanded \u003ci\u003eSecond Edition\u003c\/i\u003e further examines how volatility in options trading relates to today's stormy marketplace and shows you how to manage risk and take advantage of market volatility when investing in derivatives. It also skillfully addresses how to use historical volatility to predict future volatility for a security, or the implied volatility, and offers suggestions for dealing with that odd feature of options trading known as skew—in which the options market has, in recent decades, essentially developed its own consciousness and can respond to market conditions that defy all logic. Skew is uncertainty squared, and here, Shover describes how to work with or around it. Part One also contains new insights on the overwhelming fixation with VIX—the self-proclaimed fear gauge of the market. It breaks VIX down, providing you with important information on what VIX is, what it isn't, and how it can lead or even mislead you in making options trading decisions. \u003c\/p\u003e\u003cp\u003ePart Two digs into the tools for evaluating options trading decisions, the Greeks: delta, vega, theta, and gamma. Shover defines the values carefully and describes how each relates to volatility. This part of the new edition takes the discussion one step further with an in-depth look at some of the more intricate details of volatility—introducing you to various volatility terms such as realized volatility, term-structure \"vol of vol\", and correlations—which were once reserved for the institutional world. \u003c\/p\u003e\u003cp\u003eRounding out this detailed discussion, Part Three outlines effective strategies for trading options contracts in uncertain times, addresses the decision-making process in broad terms, and discusses how to become a steel-nerved trader. Along the way, it looks at specific options trading strategies to offset risk and reach for profit. These include the covered call, the naked and married puts, collars, straddles, vertical spreads, calendar spreads, butterflies, and condors, along with other various wingspreads, which are new to this edition. \u003c\/p\u003e\u003cp\u003eYou can prosper in options trading, even in the midst of uncertainty. \u003ci\u003eTrading Options in Turbulent Markets, Second Edition\u003c\/i\u003e will show you how to achieve this difficult goal.\u003c\/p\u003e","brand":"Bloomberg Press","offers":[{"title":"Default Title","offer_id":47990402580709,"sku":"NP9781118343548","price":75.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781118343548.jpg?v=1761787685","url":"https:\/\/k12savings.com\/es\/products\/trading-options-in-turbulent-markets-isbn-9781118343548","provider":"K12savings","version":"1.0","type":"link"}