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Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition?
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My friend recommended me this when I first started, but the truth is all the reading in the world isn't going to give you real-world experience. Start small, do your research, thorough research. Learn about greeks, IV, when to take profit, ect. Study the stocks you're interested in and know about, don't worry about trying to follow someone else's trades on a company you know nothing about.
Personally, I started small with 250 and made smart choices to bump it up to 2400 in three weeks, but I got cocky and didn't fully research an investment so I lost 1000 in one trade. If I had kept a level head I would have noticed that there was a significant short interest trying to drive the stock down and the low volume added fuel to the fire. Undervalued or not, hedge funds with billions to throw around can influence the stock price of most companies quite a bit, always be aware of that.
Once you gain some experience and understanding, day trading with the current level of volatility is pretty easy albeit risky at times. Just remember to not gamble with money you can't afford to lose. It may be boring but I keep about 5/6ths of my portfolio in equity that I rarely touch. For every one person you see on this sub that turns 40k into 250k on a MU yolo, there are ten others that turned their 40k into 0k. Be smart and goodluck!
Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition https://www.amazon.com/dp/0071818774/ref=cm_sw_r_cp_api_glt_fabc_06VNJSD6Y5PX7GKD0SF8
Can’t recommend this one enough. I’ve read it multiple times and always come back to it if i have questions.
The Euan Sinclair books will.do the math, but not super in-depth, if you want a practical treatment of how they can be used with real options trading:
Volatility Trading Positional Options Trading
InB4 everyone else recommends the Natenberg book:
Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition
https://www.amazon.com/Option-Volatility-Pricing-Strategies-Techniques/dp/0071818774
I would highly recommend against this course of action if you intend to get your information from YouTube. You would need to sit with an actual book like Natenburg's and slowly learn the stuff. It took me four years before I could comfortably touch options with knowledge of what I was doing.
You can dabble of course but you're not going to be in a good place to try and sell premium for a year's worth of bills if you're doing a 30 minute crash course on YouTube. That's my advice. I do not have any YouTube recommendations.
Tbh I learned the most about options from "In The Money" on YouTube. Not overly technical, and makes it easy to understand. But if you're really serious, you could check out this book I just bought; Option Volatility & Pricing
First, read option volatility and pricing
Next, you might benefit from a subscription service like Flashpoint Fortunes to get started.
Yep. That’s a spread. You can do it as you describe, or you can buy and sell two calls with different strikes. Try reading options volatility and pricing
You should read Options Volatility and Pricing
If you are delta hedged, then you should be fine. For instance, sell a 30 delta call and buy 30 shares of stock. The net delta of your position is now 0. This means that for small changes in the underlier price, the value of your portfolio will be unchanged. However, if the IV goes down, you win.
A good book to read about this kind of trading is Natenberg.
I got it when it was on sale for around $60 earlier in the year. It’s a good book when it comes to option mechanics. Natenberg’s Book is pretty great too.
There’s no rush for people to buy these since the PDF’s of previous editions are readily available online (and probably your library too). I do think they are worth buying if you can get them for below $70.
I agree with everyone recommending paper trading first, but I've found that you really need to open a small cash account to really get the feel of it. Also, if you're smart enough to succeed at this, then you're smart enough to read Natenberg. Check your local library before buying; that's where I found a copy.
You will lose money while you're learning. Keep your trading account separate from your savings, and don't pin your hopes on this working out. You get a pension, right? Definitely keep that job.
Option Volatility and Pricing - Sheldon Natenberg
Can be a little heavy but for anything you can find on YouTube acts as a good fill in the gaps.
depending on how much time you want to spend on it: https://textbookbasics.com/product/options-futures-and-other-derivatives-9th-edition-2014-by-john-c-hull/?utm_source=Google%20Shopping&utm_campaign=Textbookbasics&utm_medium=cpc&utm_term=2560&gclid=Cj0KCQiA9P__BRC0ARIsAEZ6irg7mZAYl...
it's difficult af and you have to be able to follow along ito integrals and shit. But it'll give you a fundamental understanding.
If you don't want to go through that slog, you can get a much more practical view with https://www.amazon.com/Option-Volatility-Pricing-Strategies-Techniques/dp/0071818774
As a vol trader, I would highly recommend Natenburg's book: https://www.amazon.com/dp/0071818774/ref=cm_sw_r_cp_apa_fabc_TbQYFb51B8F8W
I would highly recommend “Option Pricing and Volatility” by Sheldon Natenberg. Amazon Link to textbook](https://www.amazon.com/Option-Volatility-Pricing-Strategies-Techniques/dp/0071818774)
The first edition is from 1988, and the Amazon reviews for the second edition say that there are a lot of errors in the new version. How well does the 1988 edition hold up to current trading strategies? Or is there another newer book that you would recommend?
EDIT: Any thoughts on The Rookie's Guide to Options; 2nd edition: The Beginner's Handbook of Trading Equity Options by Mark D Wolfinger? Or Options as a Strategic Investment by Lawrence G. McMillan?
Sure, I'll paste the book links I gave to OP:
>https://www.amazon.in/Option-Volatility-Pricing-Strategies-Techniques/dp/0071818774
>
>https://www.amazon.in/Options-as-Strategic-Investment-Fifth/dp/0735204659
>
>https://www.amazon.in/Option-Traders-Hedge-Fund-Framework-ebook/dp/B00844NXC6
Those should cover most of the relevant topics.
>save me from potential loss made by small mistakes
If you really want to dabble with F&O then before a course or study resources, first get rid of your fear of loss. Maybe not today, maybe not tomorrow but somewhere down the line you will make a losing trade.
If the wisdom of the crowd and experience is anything to go by, you'll be extremely lucky if you only make a few small losses. No trader or teacher no matter how experienced can give you a guaranteed, fool proof way of making profits in derivatives.
What you can do is to work on your trading psychology, discipline, risk management etc. so that the day the loss comes:
i) it won't be so bad as to knock you out of the game for good
ii) you will end up learning from it and improving your techniques.
Now that my TED talk is over, I don't know of any 'teacher' but the following helped me on my journey, hopefully they will help you too:
1: Zerodha varsity. Simple but very effective
2: Options Playbook is decent for quick reference, Project Finance is decent for learning about strategies though it is US focused so apply your judgement.
3: Sheldon Natenberg's book is really good though it can get fairly heavy with maths at some points. The good news is that you can just skip the math heavy pages and focus more on good practices rather than understanding the differential equations behind the Black Scholes model.
I think a classic mistake that a lot of us make is to keep waiting for that perfect teacher, course, study material to come along - there is no such thing. It's better to get started and keep making progress. Even small incremental progress is better than waiting for the perfect help to come along.
Don't worry about making mistakes - you're not the first and you certainly won't be the last to make mistakes. Just don't repeat mistakes - that strategy has a near 100% failure rate ;)
Options Volatility and Pricing. Also get the workbook.
I recommend this book.
Otherwise refer to the sidebar for more resources.
Itt szoktak lenni erdekes beszelgetesek: /r/thetagang/
Meg a youtubon van sok video, nezd meg pl. ezt: https://www.youtube.com/watch?v=dRYBh6dtxjY
Igen, komolytalan a video, de azert konnyen ertheto. Ha szeretnel a reszletekbe menni akkor olvasd el ezt a konyvet (nem fogod, borzasztoan unalmas).
A masik kommentben valaki emlitette, hogy ez nagyon kockazatos... nos, nem az. Csak az gondolja kockazatosnak aki soha nem csinalta.
Read the two books below several times. Then start trading small to apply theory to practice. As you get comfortable, scale up.
Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition https://www.amazon.com/dp/0071818774/ref=cm_sw_r_cp_api_glt_fabc_X9X4NVR9CGCG0KCFX8PT
The Option Trader's Hedge Fund: A Business Framework for Trading Equity and Index Options (paperback) https://www.amazon.com/dp/0134807529/ref=cm_sw_r_cp_api_glt_fabc_FTSY88PWP7E400E3FCWZ
This is good one, but big volume, covers everything
https://www.amazon.com/Option-Volatility-Pricing-Strategies-Techniques/dp/0071818774
The Options Alpha YouTube channel / podcast is very informative for entry level introduction: https://www.youtube.com/c/OptionAlpha
Mandatory reading on my volatility desk is Natenburg's Option Pricing and Volatility book: https://www.amazon.com/dp/0071818774/ref=cm_sw_r_cp_apa_i_dMAtFb6P1NJQ0 It covers the gamut from entry level to advanced.
You should probably look into getting a backtester, I believe the creator of Option Alpha has one on his site.
Be cautious and paper trade, as there are a lot of risks.
Best of luck !
Greeks and Implied Vol are the likely culprits. Would highly recommend reading Option Vol and Pricing -> https://www.amazon.com/Option-Volatility-Pricing-Strategies-Techniques/dp/0071818774
Posted this in another options thread so I'll just copy and paste it here:
>* Option Volatility and Pricing (Natenberg)
>* Options as a Strategic Investment (McMillan)
>* Dynamic Hedging (Taleb)
>* The Volatility Surface (Gatheral)
>* Trading Volatility, Correlation, Term Structure, and Skew (Bennett)
>* Volatility Trading (Sinclair)
>* Option Market Making (Baird)
>* Volatility and Correlation (Rebonato)
>* Trading VIX Derivatives (Rhoades)
My all-time favorite is Expected Returns (Ilmanen)
I'm still relatively new, having only traded for 2 years. The combination of reading as much as I can and then practicing it for real has been the best learning combo. That's how I stumble onto new strategies or learn to never do something again.
You’re wrong. You’re correct that you’re an idiot because you’re fighting me on something which is a fact.
Market makers don’t “price” options any more than they “price” stocks. The market prices options, from which we can calculate implied volatility. You don’t know what you’re talking about so I’m very confused why you are so adamant in this.
Recommended homework- https://www.amazon.com/Option-Volatility-Pricing-Strategies-Techniques/dp/0071818774
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