Option Trading. Pricing & Volatility Strategies & Technique by Euan Sinclair
An A to Z options trading guide for the new millennium and the new economy
Written by professional trader and quantitative analyst Euan Sinclair, Option Trading is a comprehensive guide to this discipline covering everything from historical background, contract types, and market structure to volatility measurement, forecasting, and hedging techniques.
This 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.
- Explains how to break down a typical position, and repair positions
- Other titles by Sinclair:Volatility Trading
- Addresses the various concerns of the professional options trader
Option 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.
Table of Contents
The Role of Mathematics.
The Structure of this Book.
Chapter 1 History.
Chapter 2 Introduction to Options.
Specifications for an Option Contract.
Uses of Options.
Chapter 3 Arbitrage Bounds for Option Prices.
American Options Compared to European Options.
Absolute Maximum and Minimum Values.
Chapter 4 Pricing Models.
General Modeling Principles.
Choice of Dependent Variables.
The Binomial Model.
The Black-Scholes-Merton (BSM) Model.
Chapter 5 The Solution of the Black-Scholes-Merton (BSM) Equation.
Chapter 6 Option Strategies.
Forecasting and Strategy Selection.
Chapter 7 Volatility Estimation.
Defining and Measuring Volatility.
Volatility in Context.
Chapter 8 Implied Volatility.
The Implied Volatility Curve.
Parameterizing and Measuring the Implied Volatility Curve.
The Implied Volatility Curve as a Function of Expiration.
Implied Volatility Dynamics.
Chapter 9 General Principles of Trading and Hedging.
Trade Sizing and Leverage.
Scalability and Breadth.
Chapter 10 Market Making Techniques.
Trading Based on Order-Book Information.
Chapter 11 Volatility Trading.
Hedging in Practice.
The P/L Distribution of Hedged Option Positions.
Chapter 12 Expiration Trading.
Exercising the Wrong Options.
Irrelevance of the Greeks.
Expiring at a Short Strike.
Chapter 13 Risk Management.
Example of Position Repair.
Stock Risk: Dividends and Buy-in Risk.
The Early Exercise of Options.
Appendix A Distributions.
Moments and the “Shape” of Distributions.
Appendix B Correlation.
EUAN SINCLAIR 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 Volatility Trading.
How to understand about technical analysis: Learn about technical analysis
In finance, technical analysis is an analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.
Behavioral economics and quantitative analysis use many of the same tools of technical analysis, which,
being an aspect of active management, stands in contradiction to much of modern portfolio theory.
The efficacy of both technical and fundamental analysis is disputed by the efficient-market hypothesis, which states that stock market prices are essentially unpredictable.
Swing Trading Course:
Swing trading is a speculative trading strategy in financial markets where a tradable asset is held for between one and several days in an effort to profit from price changes or ‘swings’.
A swing trading position is typically held longer than a day trading position, but shorter than buy and hold investment strategies that can be held for months or years.
Profits can be sought by either buying an asset or short selling. Momentum signals (e.g., 52-week high/low)
have been shown to be used by financial analysts in their buy and sell recommendations that can be applied in swing trading.
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- Lectures 0
- Quizzes 0
- Duration Lifetime access
- Skill level All levels
- Language English
- Students 137
- Assessments Yes