Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits
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 theSecond EditionofTrading 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 pricingVertical spreads, wing spreads, and calendar and diagonal spreadsDelta-neutral trading—including the trading of implied and realized volatilityAdvanced option trading issues from straddles and strangles to ratio and complex spreadsAnd much moreWhether 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 endeavor.