"Option Volatility and Pricing: Advanced Trading Strategies and Techniques" by Sheldon Natenberg is an extensive and comprehensive guide to options trading that is designed to help both novice and experienced traders navigate the complex world of options. The book is divided into four parts, each of which focuses on a different aspect of options trading.
Part I of the book provides an introduction to options and their properties, such as strike price, expiration date, and the different types of options. Natenberg then moves on to discuss options pricing, volatility, and other important concepts.
Part II of the book focuses on volatility, which is a critical factor in options trading. Natenberg explains how to measure and predict volatility, and provides guidance on how to use volatility to develop effective trading strategies.
Part III of the book covers a range of different trading strategies, from basic to more complex. Natenberg explains the pros and cons of each strategy, and provides guidance on when each strategy is most appropriate. The book also includes a section on risk management, which is critical for any options trader.
Part IV of the book focuses on market makers, who are responsible for providing liquidity in the options market. Natenberg explains how market makers operate, and provides guidance on how to trade effectively with market makers.
One of the strengths of the book is its organization. Natenberg has structured the book in a logical manner, and each chapter builds on the previous one. The book also includes numerous examples and case studies that help readers understand how options trading works in practice.
Another valuable feature of the book is the comprehensive glossary of options trading terms. The glossary is an excellent resource for anyone new to options trading, as it provides a clear explanation of the most important terms and concepts.
However, the book does have a few weaknesses. Firstly, the book is quite technical and may be difficult for novice traders to understand. Additionally, some of the examples and case studies are overly complex, which may not be helpful to inexperienced traders.
Overall, "Option Volatility and Pricing: Advanced Trading Strategies and Techniques" is an excellent resource for experienced traders who are looking to improve their options trading strategies. The book is well-written, comprehensive, and provides a thorough understanding of the subject matter. The book is not recommended for novice traders, but for experienced traders looking to take their options trading to the next level, this book is a must-read.
