{"product_id":"option-trading-isbn-9780470497104","title":"Option Trading","description":"\u003cp\u003eAn A to Z options trading guide for the new millennium \u003ci\u003eand\u003c\/i\u003e the new economy\u003c\/p\u003e \u003cp\u003eWritten by professional trader and quantitative analyst Euan Sinclair, \u003ci\u003eOption Trading\u003c\/i\u003e is a comprehensive guide to this discipline covering everything from historical background, contract types, and market structure to volatility measurement, forecasting, and hedging techniques.\u003c\/p\u003e \u003cp\u003eThis comprehensive guide presents the detail and practical information that professional option traders need, whether they're using options to hedge, manage money, arbitrage, or engage in structured finance deals. It contains information essential to anyone in this field, including option pricing and price forecasting, the Greeks, implied volatility, volatility measurement and forecasting, and specific option strategies.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eExplains how to break down a typical position, and repair positions\u003c\/li\u003e \u003cli\u003eOther titles by Sinclair: \u003ci\u003eVolatility Trading\u003c\/i\u003e\n\u003c\/li\u003e \u003cli\u003eAddresses the various concerns of the profes\u003ci\u003esional options tra\u003c\/i\u003eder\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eOption trading will continue to be an important part of the financial landscape. This book will show you how to make the most of these profitable products, no matter what the market does.\u003c\/p\u003e \u003cp\u003ePreface xi\u003c\/p\u003e \u003cp\u003eProfessional Trading xii\u003c\/p\u003e \u003cp\u003eThe Role of Mathematics xiv\u003c\/p\u003e \u003cp\u003eThe Structure of this Book xvi\u003c\/p\u003e \u003cp\u003eAcknowledgments xix\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 1 History 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSummary 6\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 2 Introduction to Options 7\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOptions 9\u003c\/p\u003e \u003cp\u003eSpecifications for an Option Contract 9\u003c\/p\u003e \u003cp\u003eUses of Options 11\u003c\/p\u003e \u003cp\u003eMarket Structure 14\u003c\/p\u003e \u003cp\u003eSummary 20\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 3 Arbitrage Bounds for Option Prices 21\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAmerican Options Compared to European Options 25\u003c\/p\u003e \u003cp\u003eAbsolute Maximum and Minimum Values 25\u003c\/p\u003e \u003cp\u003eSummary 39\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 4 Pricing Models 41\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eGeneral Modeling Principles 42\u003c\/p\u003e \u003cp\u003eChoice of Dependent Variables 45\u003c\/p\u003e \u003cp\u003eThe Binomial Model 48\u003c\/p\u003e \u003cp\u003eThe Black-Scholes-Merton (BSM) Model 55\u003c\/p\u003e \u003cp\u003eSummary 61\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 5 The Solution of theBlack-Scholes-Merton (BSM) Equation 63\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eDelta 67\u003c\/p\u003e \u003cp\u003eGamma 72\u003c\/p\u003e \u003cp\u003eTheta 76\u003c\/p\u003e \u003cp\u003eVega 80\u003c\/p\u003e \u003cp\u003eSummary 88\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 6 Option Strategies 89\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eForecasting and Strategy Selection 89\u003c\/p\u003e \u003cp\u003eThe Strategies 93\u003c\/p\u003e \u003cp\u003eSummary 116\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 7 Volatility Estimation 117\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eDefining and Measuring Volatility 119\u003c\/p\u003e \u003cp\u003eForecasting Volatility 129\u003c\/p\u003e \u003cp\u003eVolatility in Context 132\u003c\/p\u003e \u003cp\u003eSummary 136\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 8 Implied Volatility 137\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Implied Volatility Curve 138\u003c\/p\u003e \u003cp\u003eParameterizing and Measuring the Implied Volatility Curve 142\u003c\/p\u003e \u003cp\u003eThe Implied Volatility Curve as a Function of Expiration 145\u003c\/p\u003e \u003cp\u003eImplied Volatility Dynamics 146\u003c\/p\u003e \u003cp\u003eSummary 151\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 9 General Principles of Trading and Hedging 153\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eEdge 154\u003c\/p\u003e \u003cp\u003eHedging 156\u003c\/p\u003e \u003cp\u003eTrade Sizing and Leverage 158\u003c\/p\u003e \u003cp\u003eScalability and Breadth 163\u003c\/p\u003e \u003cp\u003eSummary 164\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 10 Market Making Techniques 165\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMarket Structure 166\u003c\/p\u003e \u003cp\u003eMarket Making 169\u003c\/p\u003e \u003cp\u003eTrading Based on Order-Book Information 181\u003c\/p\u003e \u003cp\u003eSummary 189\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 11 Volatility Trading 191\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eHedging 192\u003c\/p\u003e \u003cp\u003eHedging in Practice 193\u003c\/p\u003e \u003cp\u003eThe P\/L Distribution of Hedged Option Positions 203\u003c\/p\u003e \u003cp\u003eSummary 213\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 12 Expiration Trading 215\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003ePinning 215\u003c\/p\u003e \u003cp\u003ePin Risk 219\u003c\/p\u003e \u003cp\u003eForward Risk 221\u003c\/p\u003e \u003cp\u003eExercising the Wrong Options 221\u003c\/p\u003e \u003cp\u003eIrrelevance of the Greeks 223\u003c\/p\u003e \u003cp\u003eExpiring at a Short Strike 224\u003c\/p\u003e \u003cp\u003eSummary 225\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 13 Risk Management 227\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eExample of Position Repair 228\u003c\/p\u003e \u003cp\u003eInventory 232\u003c\/p\u003e \u003cp\u003eDelta 234\u003c\/p\u003e \u003cp\u003eGamma 234\u003c\/p\u003e \u003cp\u003eVega 238\u003c\/p\u003e \u003cp\u003eCorrelation 240\u003c\/p\u003e \u003cp\u003eRho 242\u003c\/p\u003e \u003cp\u003eStock Risk: Dividends and Buy-in Risk 242\u003c\/p\u003e \u003cp\u003eThe Early Exercise of Options 243\u003c\/p\u003e \u003cp\u003eSummary 248\u003c\/p\u003e \u003cp\u003eConclusion 249\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAPPENDIX A Distributions 253\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eExample 253\u003c\/p\u003e \u003cp\u003eMoments and the “Shape” of Distributions 254\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAPPENDIX B Correlation 263\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eGlossary 271\u003c\/p\u003e \u003cp\u003eIndex 285\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eEUAN SINCLAIR\u003c\/b\u003e is an option trader with fifteen years of professional trading experience. He specializes in the design and implementation of quantitative trading strategies. Sinclair is currently a proprietary option trader for Bluefin Trading, where he trades based on quantitative models of his own design. He holds a PhD in theoretical physics from the University of Bristol. Sinclair is also the author of the Wiley title \u003ci\u003eVolatility Trading.\u003c\/i\u003e   \u003c\/p\u003e\u003cp\u003eSuccessful trading, in general, is difficult and options specifically can be complicated. In most cases, those who do well have an ability to focus on good processes and let the results take care of themselves. \u003c\/p\u003e\u003cp\u003eNobody is more familiar with this situation than professional trader and quantitative analyst Euan Sinclair. In \u003ci\u003eOption Trading,\u003c\/i\u003e he's broken down the process into the parts you need to thrive—an understanding of market structure, knowledge of the instruments you trade, a way to capture an edge, and a methodology for managing risk. \u003c\/p\u003e\u003cp\u003eWritten with the serious trader in mind, this comprehensive guide opens by exploring options, both historically and conceptually, and then uses the no-arbitrage principle to introduce option pricing—examining both static arbitrage relationships and the dynamic hedging approach. With this critical background in hand, the largest and most substantial part of the book addresses how to actually trade options. \u003c\/p\u003e\u003cp\u003eAlong the way, you'll gain an in-depth understanding of: \u003c\/p\u003e\u003cul\u003e \u003cli\u003eThe various option strategies that can be implemented, from puts and calls to strangles, straddles, and butterflies\u003c\/li\u003e \u003cli\u003eHow to measure and forecast realized volatility, the nature and behavior of implied volatility, and what it takes to successfully trade the two\u003c\/li\u003e \u003cli\u003eThe concept of expected value, the general idea of hedging, and the importance of trade sizing\u003c\/li\u003e \u003cli\u003eThe strategies behind market making\u003c\/li\u003e \u003cli\u003eThe essential aspects of risk management in option trading\u003c\/li\u003e \u003cli\u003eAnd much more\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eOption trading is an important part of the financial landscape. This book will show you how to make the most of these profitable products, no matter what the market does.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47989723955429,"sku":"NP9780470497104","price":73.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780470497104.jpg?v=1761785255","url":"https:\/\/k12savings.com\/products\/option-trading-isbn-9780470497104","provider":"K12savings","version":"1.0","type":"link"}