Hard to wrap my head around alot of the options strategies

Discussion in 'Options' started by magnum29464, Feb 9, 2008.

  1. I've known and understood the basics of options for years. After rereading the john bender portion of stock market wizards I decided to get a better grasp of options as a whole and am having a difficult time. when I see these probability distribution equations I feel like I'm in the wrong class. I also don't completely understand the implied volitility concept. what exactly does it show?

    anyone willing to help or point me to a good starting place for these more advanced options ideas i would appreciate it.

    have people found significant edges using these formulas and strategies? john bender seems to have been pretty successful with them...
  2. VictorS


    Larry (Lawrence) McMillan
    Options As a Strategic Investment

    It's the bible of options. Everything you need is in there. I was introduced to it by SOX market maker(Darkstar Trading). Trainees were required to read it.
  3. Acidjazz


    Try reading "Option Volatility & Pricing.

    It will help you understand a lot of the basics.
  4. thanks, ordered them both from amazon...
  5. MTE


    To answer your question on implied volatility.

    Implied volatility is the volatility (one of the 6 variables required to price an option, and the only unknown variable) that is implied in the current market price of an option. Essentially, you take a pricing model such as Black-Scholes and then backtrack using the market price of an option to get the volatility. Implied volatility is the market's estimate of future volatility.

    However, I suggest you read the books recommended by others.
  6. no
  7. successful options trading seems pretty difficult.
  8. MTE


  9. Tums


    successful trading of anything seems pretty difficult to the unenlightened.

    but the dark ages was a thousand years behind us; there are books in the library, forums on the internet, courses to be taken, etc. Known knowledge is never too difficult to learn.
  10. So volitility itself gives options value? even negetive volitility?
    #10     Feb 10, 2008