Synopses & Reviews
By their very natureas financial instruments with nonlinear payoff patternsoptions require both a theoretical understanding of pricing and a razor-sharp intuition about risk and reward, in order to deploy them successfully. It doesn't matter whether you're looking to use options for strategic advantage, risk management, or profitif you're uninformed, you're guaranteed to underperform.
Written by Simon Vine, a seasoned trader with over ten years of experience on Wall Street, Options: Trading Strategy and Risk Management will introduce you to the most interesting and diverse applications of options and other plain vanilla and exotic derivatives. This comprehensive resource offers a step-by-step approach to trading, hedging, and investing with options, and shares the key concepts and essential theories behind the successful use of options in today's markets. Options takes you from a basic clarification of terminology to straightforward explanations of complex options strategies. Along the way, you'll become familiar with a wide variety of topics that will enhance your options skills, including:
- Options Strategiesstraddles, strangles, calendar (horizontal) spreads, diagonal spreads, butterfly spreads, and ratio spreads
- The Risk Parameters of Optionsvolatility and the "Greeks," the impact of interest rates on options pricing and strategies, and exotic options
- Market Supportthe process of market-making on option markets
- Hedging with Optionsdynamic hedging and other complex hedging strategies
- Credit Riskof options strategies and deals
- The Psychology of Tradingself-control of psychological factors when investing and problems with standard methods of risk minimization
This practical guide will challenge you every step of the waywhether you're a risk manager, hedger, investor, or traderand the valuable question-and-answer section at the end of each chapter offers you the rare chance to test your options knowledge before putting it to work in the real world. The book also includes caveats not covered by other option experts, which will help even seasoned practitioners avoid common mistakes.
Options offer an extensive array of profit and risk management strategies that can be deployed within the context of your own risk exposure or traditional investment portfoliobut to take advantage of these opportunities, you must be prepared. Filled with real-world examples and proven strategies, this invaluable resource will not only help you make the most of options, it will secure your success.
Synopsis
By their very nature as financial instruments with non-linear payoff patterns, options require both a theoretical understanding of pricing and a razor-sharp intuition about risk and reward, in order to deploy them successfully." Authored by Simon Vine, a seasoned trader who has over 10 years of his own trading successes— and losses— on Wall Street under his belt, "Options is the definitive book on options for investors, risk professionals, and traders. Even newcomers to this market will appreciate Vine's clear, easy to understand writing style. "Options offers a step-by-step approach to teaching you how to trade, hedge or invest using options, and shares the key concepts essential to successful options use. Vine presents the foundations of option theory and key concepts required to build the necessary skills and intuition to identify and exploit options--whether you are a risk manager, hedger, investor or trader. "Options teaches you to use a wide variety of options strategies and shows you how to select the strategy that best fits your own psychological risk profile. After 10 years trading, Vine has discovered that many of the so-called "truths" about options have turned out to be false, and his book focuses on correcting many of those misconceptions. In addition to the real-world observations that only a seasoned trader with a decade of experience can make, Vine has targeted his book to be of interest to all professionals— and newcomers— actively involved in options markets, including those in sales and trading, fund management, and corporate risk management.
Synopsis
The key concepts and essential strategies behind the successful use of options
Written by Simon Vine, a seasoned trader who has over ten years of experience on Wall Street under his belt, Options is the definitive book on options for traders, investors, and risk professionals. Options provides a step-by-step approach to trading, hedging, and investing using options, and shares the key concepts essential to successful options use. Options also explores how to use a wide variety of options strategies and shows readers how to select the strategy that best fits their own psychological risk profile. Filled with real-world examples and proven strategies, this invaluable resource will be of interest to all professionals-and newcomers-who'd like to exploit options for strategic advantage, risk management, or profit.
Simon Vine (Moscow, Russia) is deputy head of the investment banking division at Alfa Bank, the largest private financial institution in Russia. He holds an MBA from Columbia Business School and a BA from the Institute for Finance and Economics in Moscow.
Synopsis
Options
"This is a clear and pedagogical book written with the cut-to-the-chase mindset of the practitioner and devoid of the academic complications. Vine sees derivatives from the standpoint of the trader, which is rare and refreshing."
Nassim Nicholas Taleb author of Fooled by Randomness
"Simon Vine's new work, Options: Trading Strategy and Risk Management, combines a first rate introduction to options with an in-depth review of the complexities of the subject. An extremely helpful book that should be of great benefit both to the uninitiated and to the many 'professionals' who think they understand derivatives."
Aleksandr M. Knaster, CEO, Alfa Bank
Written by Simon Vine, a seasoned trader with over ten years of experience on Wall Street, Options: Trading Strategy and Risk Management offers a step-by-step approach to trading, hedging, and investing with options, and shares the key concepts and essential theories behind the successful use of options in today's markets.
Comprised of short, to-the-point chapters that include challenging Q&A sections, this invaluable resource will show you how to avoid expensive mistakes and secure your success in this arena.
Synopsis
Simon Vine (Moscow, Russia) is deputy head of the investment banking division at Alfa Bank, the largest private financial institution in Russia. He holds an MBA from Columbia Business School and a BA from the Institute for Finance and Economics in Moscow.
About the Author
Simon Vine is deputy head of the investment banking division at Alfa Bank, the largest private financial institution in Russia. Prior to Alfa, he spent ten years in New York, where he was senior director in charge of derivatives at American Express Bank, ran the Foreign Exchange and Precious Metals Options Group for Union Bank of Switzerland (UBS), and traded foreign exchange options for Société Générale. Vine has published articles in Technical Analysis of Stocks and Commodities, FOW, Emerging Markets Investor, and has contributed to Capital Markets Risk, a Euromoney book publication. He holds an MBA from Columbia Business School and a BA from the Institute for Finance and Economics in Moscow.
Table of Contents
Foreword.
Introduction.
PART ONE: Basic Knowledge.
CHAPTER 1: Basic Terms.
CHAPTER 2: Drawing Option Charts.
CHAPTER 3: Introduction to Option Strategies.
CHAPTER 4: Put/Call Parity.
PART TWO: Option Strategies.
CHAPTER 5: Basic Option Strategies.
CHAPTER 6: Complex Option Strategies.
CHAPTER 7: Practical Steps in Creating and Designing Strategies.
CHAPTER 8: Delta.
CHAPTER 9: Spreads.
CHAPTER 10: Utilization of Options for Spot/Cash Trading.
PART THREE: Risk Parameters of Options.
CHAPTER 11: Introduction: Volatility and the “Greeks” (Theta, Vega, and Gamma).
CHAPTER 12: Volatility.
CHAPTER 13: Vega.
CHAPTER 14: Theta.
CHAPTER 15: Gamma.
CHAPTER 16: Impact of Interest Rates on Options Pricing and Strategies.
CHAPTER 17: Dynamic Option Hedging.
CHAPTER 18: Summing Up.
CHAPTER 19: Introduction to Exotic Options.
CHAPTER 20: Advanced Exotic Options Strategies.
PART FOUR: Market Support (Market Making).
CHAPTER 21: Market Making: Price Support of the Market.
CHAPTER 22: Introduction to Options Portfolio Management.
PART FIVE: Hedging Market Risk Reduction for Producers and Consumers.
CHAPTER 23: Hedging with Options.
CHAPTER 24: Advanced Hedging Strategies.
PART SIX: Credit Risk Analysis.
CHAPTER 25: Forward and Settlement Risks in Spot, Forward, and Nondeliverable Forward Deals.
CHAPTER 26: Risks of Settlement on Option Deals.
CHAPTER 27: Credit Risk of Option Strategies.
CHAPTER 28: Credit Risk of Exotic Options.
CHAPTER 29: Credit Risk of Combined Positions: Option-Spot/Forward.
PART SEVEN: Market Risks Management.
CHAPTER 30: Typical Mistakes of Options Risk Control.
CHAPTER 31: Recommended Approach to Risk Management Methodology.
PART EIGHT: Psychology of Trading.
CHAPTER 32: Personal Factors in Risk Evaluation.
CHAPTER 33: Self-Control of Psychological Factors when Investing.
CHAPTER 34: Problems with Standard Methods of Risk Minimization.
Conclusion.
APPENDIX A: Options: Mathematical Models.
APPENDIX B: “Greeks”—Parameters Used in Portfolio Management.
APPENDIX C: American Options: Options on Futures, Currencies, Commodities, Equities, and Bonds.
Notes.
Glossary.
Bibliography.
Index.