Volatility Trading, + CD-ROM (Wiley Trading) | 
 enlarge | Author: Euan Sinclair
Publisher: Wiley
Category: Book
List Price: $65.00
Buy New: $34.38
You Save: $30.62 (47%)
New (36) Used (10) from $34.38
Rating:  11 reviews
Sales Rank: 25003
Media: Hardcover
Pages: 224
Number Of Items: 1
Shipping Weight (lbs): 1
Dimensions (in): 9.1 x 6.1 x 0.9
ISBN: 0470181990
Dewey Decimal Number: 332.645
EAN: 9780470181997
ASIN: 0470181990
Publication Date: June 23, 2008
Availability: Usually ships in 1-2 business days
Shipping: International shipping available
Condition: Brand New, Perfect Condition, Please allow 4-14 business days for delivery. 100% Money Back Guarantee, Over 1,000,000 customers served.
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Product Description
In Volatility Trading, Sinclair offers you a quantitative model for measuring volatility in order to gain an edge in your everyday option trading endeavors. With an accessible, straightforward approach. He guides traders through the basics of option pricing, volatility measurement, hedging, money management, and trade evaluation. In addition, Sinclair explains the often-overlooked psychological aspects of trading, revealing both how behavioral psychology can create market conditions traders can take advantage of-and how it can lead them astray. Psychological biases, he asserts, are probably the drivers behind most sources of edge available to a volatility trader.
Your goal, Sinclair explains, must be clearly defined and easily expressed-if you cannot explain it in one sentence, you probably aren't completely clear about what it is. The same applies to your statistical edge. If you do not know exactly what your edge is, you shouldn't trade. He shows how, in addition to the numerical evaluation of a potential trade, you should be able to identify and evaluate the reason why implied volatility is priced where it is, that is, why an edge exists. This means it is also necessary to be on top of recent news stories, sector trends, and behavioral psychology. Finally, Sinclair underscores why trades need to be sized correctly, which means that each trade is evaluated according to its projected return and risk in the overall context of your goals.
As the author concludes, while we also need to pay attention to seemingly mundane things like having good execution software, a comfortable office, and getting enough sleep, it is knowledge that is the ultimate source of edge. So, all else being equal, the trader with the greater knowledge will be the more successful. This book, and its companion CD-ROM, will provide that knowledge. The CD-ROM includes spreadsheets designed to help you forecast volatility and evaluate trades together with simulation engines.
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| Customer Reviews: Read 6 more reviews...
 "Potpourri" October 2, 2008
G. Burnett (Australia)
0 out of 1 found this review helpful
In "Volatility Trading" Euan Sinclair presents a compilation of the most notable features of many, many theorists. A lot of the theories have no practical value but they do make colourful commentary that leads to a meaningful conclusion. In addition he includes a potpourri of formulae including the Corrado and Su formula for including kurtosis and skewness in the normal Black Scholes Merton model call value. The Corrado Su skew curve, skew and kurtosis cones and volatility cones are included in files on the CD-Rom which accompanies the book.
Please note that Sinclair states that most of the information in " Options, Futures and other Derivatives" by John C Hull is prerequisite to reading his book. Sinclairs book is not suitable for beginners.
 A Gem September 18, 2008
Aniruddha Pant (India)
3 out of 4 found this review helpful
This is one of the best books I have seen on trading. Each and every page in this book has extremely useful information relevant for practical option trading. Author is clearly a successful trader himself is not afraid of giving insights he has got into the underlying behavior and corresponding option dynamics. It is however not an introductory book and probably needs to be read multiple times before one can assimilate the material enough to implement it in software to use it in practice.
I hope the author undertakes an effort to write a more comprehensive book on option trading which is not limited to volatility trading.
excellent book July 31, 2008
Touma M. Elias (San Diego, Ca)
3 out of 5 found this review helpful
This is certainly one of the best books I read about Volatility. It is very practical and reveals a lot of details of the anatomy of trades, which were never covered in such details, in other books. I would like,however, to see the author make all his, software used, available to the public, in a software package that can be bought or licensed. Excellent book.
Tom Elias.
It takes a lot of experience, time, and energy to know - and I mean really know - what Sinclair shares in this book July 31, 2008
Derek G. Nokes (Canada)
11 out of 12 found this review helpful
Over the course of my career I have come to own literally hundreds of books about derivatives pricing and trading. Few of these books manage to communicate the essence of what a professional derivatives trader needs to do to be successful. Volatility Trading is truly rare in that it presents a framework for analysis that is supported by a clear, well-defined trading philosophy: systematically find an edge and learn how to exploit it correctly. It takes a lot of experience, time, and energy to know - and I mean really know - what Sinclair shares in this book.
I found the chapter on volatility measurement and forecasting to be particularly useful. Few options traders take the time to understand the efficiency of their volatility estimators. Even fewer could clearly communicate that what we need is a view on the volatility distribution rather than a point forecast when we are trading volatility.
The author's mix of trading philosophy, quantitative intuition, and obvious trading experience is refreshing. The straight-forward no nonsense writing style also makes the book very readable. I would recommend this book to any quantitatively-minded trader. The chapter on money-management alone is easily worth the price of the book.
Practical and Applicable Advice for Traders July 28, 2008
sarahmas (Chicago, IL USA)
4 out of 6 found this review helpful
Sinclair's book bridges the gap between highly technical, formula-driven option pricing textbooks and collections of anecdotes meant to give insight into the behavioral aspect of trading. He gives practical guidance to traders new and experienced with brevity, clarity, and humor. Volatility Trading is an important and useful addition to any trader's library.
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