Review: The Option Trader’s Hedge Fund by Dennis A. Chen and Mark Sebastian

Friday, July 13, 2012

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There is a well-established formula when it comes to books about options. The typical options book has sections that explain what puts and calls are, that review the different spread types, that explain the greeks, and that discuss implied and historical volatility.  One reason I liked The Option Trader’s Hedge Fund: A Business Framework for Trading Equity and Index Optionsis that it breaks that formula. Chen and Sebastian approach options trading through the metaphor of “The One Man Insurance Company,” (TOMIC)…

Interview with Tadas Viskanta of Abnormal Returns, Part 2

Wednesday, May 9, 2012

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Here is the second part of my interview with Tadas Viskanta, author of Abnormal Returns: Winning Strategies from the Frontlines of the Investment Blogosphere. We cover a lot of interesting material here, including the idea of using financial advisors as a buffer against our own cognitive biases, Tadas’s idea of consilience among different disciplines, and what kind of changes we can expect in the world of financial services.

Interview with Tadas Viskanta of Abnormal Returns, Part 1

Saturday, April 28, 2012

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Unless you just got your first ever internet connection yesterday, you already read Abnormal Returns on a daily basis. Recently, I got the chance to interview financial omnivore and expert curator Tadas Viskanta about his new book, Abnormal Returns: Winning Strategies from the Frontlines of the Investment Blogosphere. First, I want to say that I wish this book had been written when I first got interested in financial markets. It covers just about every topic that matters in investing…

New eBook short: Iron Condor Spread Strategies (FT Press)

Tuesday, May 24, 2011

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I’ve just published a new eBook short with FT Press, titled Iron Condor Spread Strategies: Timing, Structuring, and Managing Profitable Options Trades. As regular readers know, we’ve published a newsletter and strategy for investors since 2007 trading iron condors and other market-neutral positions, and this essay builds on that experience. I’m particularly proud of two aspects of the text: Few traders apply rigorous delta-hedging regimes in conjunction with condor positions, and even fewer…

New eBook Short: Options and the Volatility Risk Premium

Tuesday, March 1, 2011

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I’m excited to announce the publication of Options and the Volatility Risk Premium, a short eBook (about 4500 words) published by FT Press. I have written about the volatility risk premium (VRP) before on this blog, and published a feature article in Expiring Monthly last year on the presence of the VRP in commodity options. The first part of the text explains the concept of the volatility risk premium and gives a rationale…

The Rookie’s Guide to Options (Review)

Thursday, April 2, 2009

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The Rookie’s Guide to Options: The Beginner’s Handbook of Trading Equity Options Mark D. Wolfinger (W&A, 2008) One of the ideas central to Mark’s work in his blog, his magazine articles, and in this book is that options are an excellent tool for just about any investor who wants to manage risk more effectively. What’s especially admirable about this book is that it takes a reader with no prior knowledge about options from the most basic concepts all the…

Short Term Trading Strategies That Work (Review)

Friday, January 9, 2009

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As technology advances, the variety of tools and strategies available to individual traders increases accordingly, and for newer traders the sheer number of techniques and strategies on offer can be daunting.  Short Term Trading Strategies That Work by Larry Connors is a nice introduction to some of the trading rules and strategies that have proven consistently helpful for navigating the markets. One of the best things about this text is that each strategy or technique is treated in quantitative…

An Antihumanist New Year’s Resolution

Friday, January 2, 2009

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Our New Year’s resolution is to exert as little control as possible over our trading. Why?  Because humans are terrible at decision-making, at changing, at acting in any way other than we have in the past.  On a collective level, we can’t seem to stop foisting unnecessary wars and economic crises on ourselves; as individuals, we only rarely pursue our real long term best interests. Human behavior is like a stock whose long term moving average never changes direction: sure,…

Cygnophobia and Robustness

Thursday, December 11, 2008

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What is fear of swans called? We’ve searched and although it doesn’t seem to exist – so far – can we suggest ‘cygnophobia’, from the latin cygnus for swan? -WikiAnswers People love them some Taleb, and for good reason.  Both The Black Swan and Fooled by Randomness are good reads, with interesting and provocative ideas scattered liberally throughout.  But ever since the notion of the “black swan” (an unpredictable and counterfactually inexplicable event with…

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Jared Woodard specializes in trading volatility as an asset class. With over a decade of experience trading options and other volatility products ... Read More

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