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Options Trader's Workbook, The: A Problem-Solving Approach
- By Jeff Augen
- Published Dec 4, 2008 by FT Press.
- Copyright 2009
- Dimensions: 6 X 9
- Pages: 240
- Edition: 1st
- Book
- ISBN-10: 0-13-714810-0
- ISBN-13: 978-0-13-714810-3
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Product Author Bios
Jeff Augen, currently a private investor and writer, has spent more than a decade building a unique intellectual property portfolio of databases, algorithms, and associated software for technical analysis of derivatives prices. His work, which includes more than a million lines of computer code, is particularly focused on the identification of subtle anomalies and price distortions.
As a cofounding executive of IBM’s Life Sciences Computing business, he defined a growth strategy that resulted in $1.2 billion of new revenue and managed a large portfolio of venture capital investments. From 2002-2005, he was President/CEO of TurboWorx, a software company founded by the chairman of the Department of Computer Science at Yale University. He is the author of two previous books: The Volatility Edge in Options Trading (FT Press 2008) and Bioinformatics in the Post-Genomic Era (Addison-Wesley 2005).
“Unlike most books that oversimplify trading situations, Augen’s approach forces you to learn by solving real-world problems where stock prices spike up and down and volatility changes constantly. Learning by doing is a distinct advantage for both novice and expert.”
--Sean Sztern, Alternative Strategies Group, Desjardins Securities
“This workbook represents a unique and effective learning tool. It will broaden your understanding of options and raise your trading skills to a higher level.”
--Dr. W. Edward Olmstead, Northwestern University, author of Options for the Beginner and Beyond
“Serious options trading requires skills that can only be learned through practice. Augen’s progressively more challenging problems definitely provide that real-world practice. There are lessons here for everyone, from beginner to sophisticated professional.”
--James Marcus, Partner, CMG Holdings, LLC
Most options books offer theory and strategies but don’t give you what you really need: hands-on practice that prepares you for real-world trading, where subtle decisions make the difference between winning and losing. Now, there’s a solution: The Option Trader’s Workbook.
Using a question and answer format, this innovative workbook covers key scenarios you’ll encounter as an option trader. Expert trader Jeff Augen explains the challenges they present, reveals the potential pitfalls, and walks you through each example to help you understand how to maximize your success. You’ll master trades designed to profit from rising or falling stock prices, rising or falling volatility, time decay, rapid price spikes, and many other market dynamics. Each section helps you build your skills one trade at a time---whether you’re new to options or you’ve been trading for years.
- Learn by doing--not by reading or memorizing
Practice real decision-making in real trading situations - Gain a detailed, intuitive understanding of pricing
Understand exactly what must happen for your trade to be profitable - Learn to identify efficient trade structures
Avoid errors that cause losses even when you’ve correctly predicted a stock’s direction - Learn how to manage risk effectively
Optimize profits by choosing the right option strategy for a particular situation - Use complex trading strategies with confidence
Master highly profitable techniques used by professionals
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67 of 70 people found the following review helpful
Persevere and don't give up on this book, By science-buff (Fremont, CA, USA) - See all my reviews
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This review is from: The Options Trader's Workbook: A Problem-Solving Approach (Paperback)
Using a question/answer approach to teach the intricacies of options is a great innovation in Augen's book. The problems posed are interesting and tantalizing. But Augen is not very careful with the answers he provides in the book. Many of the questions require the reader to do some simple high-school arithmetic but Augen typically gives you a cryptic numerical value as answer, leaving you clueless as to how the value is derived, or whether you make a mistake somewhere doing all that arithmetic.If Augen only provides the details of the intermediate steps in an answer, he may have lost less readers who were already perplexed by the challenging topic of options itself. Sometimes he may even have found quite a few preventable errors in his numerical answers. When I read Page 32, the term "structure of volatility" was italicized. It took me another 46 pages before I found to my horror that Augen forgot to italicize the word "term" in front of the phrase. Page 109... Read more
20 of 22 people found the following review helpful
Excellent Book, By
This review is from: The Options Trader's Workbook: A Problem-Solving Approach (Paperback)
I am not giving this book 5 stars because it is the next "War and Peace" or because it is an easy and fun reading experience. I am giving it 5 stars because it is very difficult to comprehend, the concepts require professional diligence and because it is unlikely that many persons will be able to master the material - exactly like the options markets. If readers are serious about entering the high-risk options trading arena it is better to get an introduction into the difficulty that they will face rather than reading the overly optimistic hype that most trading advertisers teach.When option products were introduced in the 1970's they became an esoteric venue where there were not too many traders involved and there was much less understanding of the mechanics of the strategy. It was relatively easy to trade (even though there were much thinner markets at that time) and to generate profitable outcomes. Trading today has become an extremely completive game with... Read more
19 of 21 people found the following review helpful
If you liked Augen's The Volatility Edge, then you'll welcome this workbook, By
This review is from: The Options Trader's Workbook: A Problem-Solving Approach (Paperback)
The workbook is like having an experienced options trader as a personal mentor. Augen guides you through the process of evaluating options positions, adjusting options positions, and then taking them off. Readers who actually work their way through the scenarios presented, before looking at the answers, will more fully benefit from this book. This book takes the trader through many of the same issues presented in The Volatility Edge but adds much new material and new insights that could not be fully presented in the previous book's textbook format. Instead those issues are better shown in a question and answer format as in this workbook. I really learned a lot from this workbook and you can too!
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Online Sample Chapter
The Option Trader's Workbook: Pricing Basics
Table of Contents
Preface ix
Notes 1
Chapter 1 Pricing Basics 3
Chapter 2 Purchasing Puts and Calls 43
Chapter 3 Covered Puts and Calls 91
Chapter 4 Complex Trades--Part 1 125
Chapter 5 Complex Trades--Part 2 173
Glossary 215
Index 221
Sample Pages
Download the sample pages (includes an excerpt from Chapter 1 and the Index)
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