Options and Options Trading: A Simplified Course That Takes You from Coin Tosses to Black-Scholes

by Robert W. Ward

Book Overview

An introduction to the complex world of options that every investor can use

Too many books on options trading make the mistake of assuming that readers can already tell a delta from a sigma summation. Options and Options Trading breaks the code that envelops the often-foreign language of options, providing an accessible introduction into how the options market works as it explains the rules that traders must understand if they...

• Format: Hardcover
• Language: English
• ISBN: 0071432094
• ISBN13: 9780071432092
• Release Date: May 2004
• Publisher: McGraw-Hill Companies
• Length: 413 Pages
• Weight: 1.70 lbs.
• Dimensions: 1.4" x 6.1" x 9.4"

Customer Reviews

Very good for gaining an understanding of options

I appreciated this book because of its easy explanations of the most popular strategies, and its thorough discussions of the risks involved. A couple of years ago my friend told me he was given a sure thing: Buy Xerox stock and earn free money by selling Calls against it. He said there was a guaranteed 37% return over the next year or two. I didn't understand options, but I knew there's no such thing as a sure thing. When the strategy started losing, he doubled up and then it really went bad. At the time, I didn't have an argument for why he should have been more cautious; now that I've read Options and Options Trading, I do. In "The Best Option Strategies" chapter, I found what he'd done is called a Covered Write. According to the book, it's the most popular beginner's strategy, and it isn't even close to the sure thing that most people think it is. As I'd suspected, my friend didn't have a clue about how much risk he was taking. The reason I bought the book was because I wanted to see if I could understand options enough to be able to make money with them (and, because I'd always wanted to know what my friend had really gotten himself into). I'd advise anyone who's considering options to get this book and read the trading section thoroughly. It seems like you don't even have to understand the math if you skip to the chapters on trading and risk; it's all spelled out there in detail. My friend might have saved a lot of money if he'd read this book before he leaped; and, now that I've read it, I'm confident that I'll be better able to navigate these waters than he was.

Best option book ever

I've dabbled in options trading but until I read this book I always felt like I was an amateur playing a pro's game. The reason I felt this way was that I never really understood the mechanics of what I was doing. I knew that option trading was based on a probability model called Black-Scholes, but I had no idea what that meant. And I always felt like I would get better results if I had this knowledge. I've read other options books - but they all assume an advanced knowledge of math. The author has a genius for taking difficult concepts like 'path dependency' and 'binomial distribution' and making them comprehensible - even to math-challenged people like me. After reading this book I have a lot more confidence that I know the rules of the game and I fully expect I will have better results in the future. Simply put, this book is 'one of a kind'. Nothing else approaches it as a primer for an amateur interested in learning about options. I enthusiastically recommend it!

Interesting and Fun to Read

Robert Ward is an extremely intelligent author. He knows how to teach people and keep them interested. He made little jokes here and there that really made me want to learn about options. My favorite section of the book was called "What's Logs Got to Do With It?!" I've never seen a book about Options with jokes about logarithms and Tina Turner's hit song "What's Love Got to Do With It"...That is what makes this book unique. It's not your boring math book. It's actually quite hillarious. I was laughing and learning at the same time. Good book!

Options for Dummies (like me)

Over the course of four undergraduate and graduate degrees I took a total of one math and zero business and finance courses. I watch the money channels on cable, and I pick up a few things, but most of it might as well be in Mongolian to me. I was the perfect candidate for Robert Ward's excellent new book, whihc might be subtotled "Options for Dummies." His Options and Options Trading is a practical, no-nonsense primer for the complex and mysterious world of options. For the uninitiated like me, it is difficult going at times, but if you discipline yourself and muscle through in the end you have covered every aspect of buying, selling, and profiting from options. His goal is introduction and translation, not advanced trading strategies. In this he succeeds masterfully. Ward demonstrates a genius for making the inscrutable accessible, leading the reader by the hand with vivid language, illustrations, and humor. His pace is steady and deliberate, but never rushed. He writes with an ease and comfort that comes from a complete mastery of his subject. Ward instills confidence in his readers by demonstrating mathematically that good luck is not needed to succeed in options trading. And conversely bad luck will never ruin the sensible trader, who realizes he can "never be bigger than the market." Ward telegraphs the progression of his program well, by breaking the concepts down into many easily digestable chapters, grouped in larger sections. It is also nicely bound and packaged, and well-indexed, by McGraw Hill. About the only criticisms I have are very mild ones: 1. Frankly the foreword by John Fallon comes off as a little smug and self-serving, and adds nothing to the discussion except some interesting biographical tidbids on Ward. 2. I did great on my math SATs, but, again, without adequate course work, beginning in chapter seven I found the math tough going sometimes. This is cearly, however, a function of the subject, not the author. Or maybe its a function of this reader! It is unavoidable. And for this math-ophobe, he surely minimized the pain. Just a few pages into teh book it's very clear why Ward has been so successful, both as a trader and as a teacher. Add writer to the list now. A truly magnificent work in every way. One of the best book purchases I have ever made, and I plan to buy extra copies for Christmas gifts.

Good book without any complex math

Black-Scholes is the fundamental tool in computing the option prices. The author does an excellent job in deriving the formula without using any intense maths. Having an engineering background, I personally found the book fairly basic in terms math involved but I still appreciated the fact how a complex formula could be derived from using an every day example and without using any difficult equations. Very good job there. If you want to understand the basics and fundamentals behind the option pricing and evaluations and are mathematically challenged, then I strongly recommend that you read this text. This book lays the foundation and builds up the background needed for more complex text on options. This is very important because math in any other book will confound people without calculus knowledge. However, if you want to learn the option trading strategies, then this book doesn't do a very good job. It briefly describes those strategies, A book by Mcmillan or Kolb or Jabbour is well suited for that purpose. I don't think the author's intention in this book was to explain in detail different option strategies. This book is more focused in deriving the Black-Scholes formula in a very simple manner just as the title suggests and also to provide a good background on options in general. Reading this book will help you understand options pricing and will put you ahead of many traders. I have read this book in its entirety and I think the book deserves 5-stars for its simplictic approach.