Volatility: Practical Options Theory

by Adam S Iqbal

Gain a deep, intuitive and technical understanding of practical options theory The main challenges in successful options trading are conceptual, not mathematical.  Volatility: Practical Options Theory provides financial professionals, academics, students and others with an intuitive as well as technical understanding of both the basic and advanced ideas in options theory to a level that facilitates practical options trading.  The approach taken in this book will prove particularly valuable to options traders and other practitioners tasked with making pricing and risk management decisions in an environment where time constraints mean that simplicity and intuition are of greater value than mathematical formalism. The most important areas of options theory, namely implied volatility, delta hedging, time value and the so-called options greeks are explored based on intuitive economic arguments alone before turning to formal models such as the seminal Black-Scholes-Merton model.  The reader will understand how the model free approach and mathematical models are related to each other, their underlying theoretical assumptions and their implications to level that facilitates practical implementation. There are several excellent mathematical descriptions of options theory, but few focus on a translational approach to convert the theory into practice. This book emphasizes the translational aspect, while first building an intuitive, technical understanding that allows market makers, portfolio managers, investment managers, risk managers, and other traders to work more effectively within―and beyond―the bounds of everyday practice. This book allows its readers to gain more than a superficial understanding of the mechanisms at work in options markets. Volatility gives its readers the edge by providing a true bedrock foundation upon which practical knowledge becomes stronger.

Genres: Finance

208 pages, Hardcover

Published October 2, 2018

Reviews

[Kenny · Rating 5 out of 5]

Fantastic book, really solid introduction. A fair amount of math but he explains around it so even if you don't understand partial differential equations you will be able to grasp how options work and are priced. I underlined a lot of this book, will definitely be re-reading it! Thanks!

[Ha Do · Rating 5 out of 5]

Best book I’ve ever read in option trading.
This can be considered as bible or must-read for option trader/ fund manager

[Cyberjoe · Rating 5 out of 5]

Excellent introduction to the Black - Scholes - Merton model. There’s definitely lots of mathematical expressions, and the reader should be able to apply partial derivatives and the basics of probability theory. The examples how the various Greeks are used in professional option trading are particularly insightful.

[Russell Chee · Rating 3 out of 5]

A nice, practical approach to analysing options which starts from reality and applications (what options are for, what causes the Greeks to move etc) and then works into theory. Still probably will forget a lot of this if not working in the field, though.

[Socrates231 · Rating 5 out of 5]

By far the best book for prospective (FX) options traders. While (new) traders are the book's intended audience, (new) quants can also learn a thing or two from the book's hands-on approach.