Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits
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A top options trader details a practical approach for pricing and trading options in any market condition
The options market is always changing, and in order to keep up with it you need the greeks―delta, gamma, theta, vega, and rho―which are the best techniques for valuing options and executing trades regardless of market conditions. In the Second Edition of Trading Options Greeks, veteran options trader Dan Pasarelli puts these tools in perspective by offering fresh insights on option trading and valuation.
An essential guide for both professional and aspiring traders, this book explains the greeks in a straightforward and accessible style. It skillfully shows how they can be used to facilitate trading strategies that seek to profit from volatility, time decay, or changes in interest rates. Along the way, it makes use of new charts and examples, and discusses how the proper application of the greeks can lead to more accurate pricing and trading as well as alert you to a range of other opportunities.
- Completely updated with new material
- Information on spreads, put-call parity and synthetic options, trading volatility, and advanced option trading is also included
- Explores how to exploit the dynamics of option pricing to improve your trading
Having a comprehensive understanding of the greeks is essential to long-term options trading success. Trading Options Greeks, Second Edition shows you how to use the greeks to find better trades, effectively manage them, and ultimately, become more profitable.
Description
The financial markets are dynamic, and in order to keep up with them, you need the greeks delta, gamma, theta, vega, and rho the best techniques for valuing options and executing trades regardless of market conditions.
With extensive experience as a market maker, retail trader, and instructor in this field, nobody understands options better than author Dan Passarelli. And now, with the Second Edition of Trading Option Greeks, he provides you with the tools you’ll need to succeed in the high-speed, highly technical arena that the options market has become.
Written to reflect current market conditions, this reliable guide will put you in a better position to effectively navigate today’s options market, which includes a host of new products, strategies, and rules. Along the way, it skillfully discusses option Greeks from both a theoretical and practical perspective, and explains how and when to use them.
Divided into four comprehensive parts, this updated edition outlines a practical approach to the greeks which measure changes in an option’s value and reinforces a trader’s understanding of option pricing, volatility, market terminology, and strategy in a way that few other books can. Topics covered include:
- Option-specific risk and opportunity, put-call parity and synthetics, and dividends and option pricing
- Vertical spreads, wing spreads, and calendar and diagonal spreads
- Delta-neutral trading including the trading of implied and realized volatility
- Advanced option trading issues from straddles and strangles to ratio and complex spreads
- And much more
Whether you’re a professional trader or active individual trader, comprehensive knowledge of the greeks can help you avoid common pitfalls, limit risk, and increase profit potential. Putting the insights found here into practice will put you in a better position to excel at this challenging endeavour.
