From novice to riskarb...

I have a similar feeling... I feel that Cottle is the stage of understanding I would love to ultimately achieve, and I am seeking the best route to build myself up so I can read Cottle and not find it tough-going...

 

Yes, gamma scalping and delta-hedging are the same thing...

 

I haven't read either in years, but that may be the case. They're certainly similar in difficulty.

McMillan, or the Williams book: Fundamentals of Options Market
by Michael Williams

 

Cool! Thank you...

I will get McMillan (as opposed to Natenberg)... hopefully this will arm me to handle Cottle (or will it!?)

 

That's a tough one. For the first few years I traded options I kept both as constant references. In fact, I still keep them handy. So I'd be hesitant to pick one over the other. However, Natenberg is more applicable to the style of trading that I have migrated towards.

But what I typically tell people first starting out with options is to begin with McMillan to get a firm grounding in the nuts and bolts of trading options and the various strategies, and then to move on to Natenberg to get a deeper understanding of the Greeks and volatility trading.

 

Good idea, McMillan is sound and lighter than either Cotthle or Nate.

McMillan(or Hull)> Natenberg> Cottle> James> ... maths?

Anyway, all in due time. Get into a pattern of daily reading and you'll pound through this stuff in no-time at all.

riskarb

 

Good idea, McMillan is sound and lighter than either Cottle or Nate.

McMillan(or Hull)> Natenberg> Cottle> James> ... maths?

Anyway, all in due time. Get into a pattern of daily reading and you'll pound through this stuff in no-time at all.

riskarb

 

Thank you both Hello_Dollars and riskarb for your advice, which is much appreciated...

 

the absolutely WORST trading book ever written is

'the complete option player" by trester.

this thick book came shrink wrapped at borders, peaking my curiosity---i took the bait and purchased it. stay away from this one !

surfer

 

You're welcome, glad to help. Options math is algebraic until you get deeply into modeling/time series/stochastic process. Is it necessary to solve PDEs?(No). People always assume it's for maths-crowd. Natenberg and Cottle are sufficient to make a market.

The process can stop once you've got a sound understanding of the arbitrage. If you get into the maths, look into closed-form/StochVol models.

riskarb