Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits

by Dan Passarelli, William J. Brodsky (Foreword)

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.

Genres: Finance, Business

372 pages, Kindle Edition

First published August 22, 2012

Reviews

[Scott]

Really excellent book for someone just learning the greeks. I read the book cover to cover and the examples were relatively easy to understand. I wish there was more on Implied Volatility, but it gives you enough to start you on your journey into option trading.

[Sebastian Salamanca]

This book is gonna take you to the next level trading options. I got it for $50 used and I think Is a must have in your trading library.


It attacks options trading from the geeks view and provides so many ideas. My main ideas was, selling my shares thru diagonal spreads and many more.

Hope you can take adverting of this book the same way I did.

Some option trading knowledge will help to understand better the book. I don't think is mean to be for beginners

[Yeheyuan]

Other reviewers use he word "excellent" a lot and they are right. I picked up this book only knowing that greeks exist and describe options. By the time I read the book, I was able to look at greeks of various option contracts and understand what they mean. Definitely worth a read and a re-read as it is rich in information and very specific examples.

[Lauri Viljanen]

Non-technical and pragmatic. An easy read with a lot of good examples.

[Shahin Nader]

A solid book overall. It provides both a good introduction and a more in-depth exploration of the Greeks. I appreciated the breakdown of each Greek across various strategies, and how the book encourages thinking in terms of risk exposure rather than just profit and loss projections.

Like many books in finance, it suffers from “overwording.” A lot of the concepts are pretty straightforward, but the explanations often feel more drawn out than necessary.

I did appreciate the inclusion of strategies typically used by market makers, it broadens the scope, but the treatment felt too shallow to be useful. It came across more like an addendum than a fully integrated part of the book, and it should’ve pointed to further reading.

Part 3 is exceptional: practical, insightful, and absolutely worth the time.

A worthwhile read.

[Le Minh Nguyen]

I'm relatively new to option trading so very honestly this has been a rather tough book to read.
The wording, and perhaps the book format, make it rather difficult to understand at time. On multiple occasion I needed the help of chatgpt to better understand the implications and examples.

With that said, the book is extremely information rich, and the author goes into deep detail about the different scenario outcome for each strategy.
The graph illustration also make the concept clear. I particularly find the details of strategies to benefit from sideway movement, and high implied volatility to be extremely interesting. I might or might not ever use these strategies, but it helps me better understand what others are doing out there in the market, and help me better understand the price spread when it happen.

[Ondrej]

One of the best books on the topic with many actual examples, this book will move a beginner to an intermediate option trader. Book is missing how to adjust trades which went wrong and some other advanced concepts are only mentioned, but still a great book where difficult topics are very well explained.

[Sjors]

Excellent book about the uses of option Greeks, incl. volatility trading. If I should decide to set up delta-neutral positions to reap volatility gains or do gamma-scalping, I shall refer back to this volume. In my current view, the risk/reward ratio of this type of trading is too modest to justify its apparent complexity - but I may revisit this viewpoint at a later time.

[Glenn M]

Excellent introductory book to the "Greeks." Taught me to think in terms of characteristics of options and options-as-volatility-plays. Provides plenty of realistic scenarios of trades and encourages great practice regimens. Fantastic starter book to options trading as a whole.

[Bablu Kumar]

Best book to visualize trade in terms of Greeks

This is the best book to visualize trade in terms of Greeks. This book significantly improvement my trading style. Must read for options traders.

[GaidenSpence]

Really good book for anyone starting out to learn about their Greeks for options trading loaded with easy and intuitive examples that really help the conceptually understand how options come with different Greek risks without intensive math formulae

[Cong Ge]

practical guide for newbie

It is good because it explains some very important rules with extremely simple words and some common examples.

Good luck!

[Rajesh Kuppuswamy]

must read for understanding relationships with option Greeks

[Le Beier]

I got totally lost on the examples which talks about negative gamma and there should be some explanation on what it really means to have negative gamma.

[Virginia]

The perfect approach: the simpler the better. Passarelli simplifies and summarises option strategies and greeks.

[Jack]

Possibly one of the best books on Greeks. Crystal clear on how to predict option prices to an extent based on Greeks. Various strategies discussed as well

[Pedro Branco]

A very good book on this topic. Recommended.

[Max]

great intro to option greeks

[Utkarsh Ruhela]

Say no to futures and options, kids.

[Abdoul]

I’ve read dozens of books on the subject but no one goes as straight to the point than Dan and yes without excessive self promotion which incredibly rare in the space

[Dilbag Singh]

Best book to learn option.