Providing savvy market players with a way to react quickly to event-driven opportunities and trends, exchange traded binary options are a unique type of derivative instrument offering fixed risk and reward. Available on four asset classes—stock index futures, commodity futures, Spot Forex and economic data releases—they are distinctly different from regular put/call options in that their pay-out structure offers only two potential outcomes, or settlement values: 0 or 100. The first guide focussing exclusively on this fast-growing sector of the options market, Trading Binary Options examines the key differences between regular options trading and binary options trading and describes how binary trading is done. It also gives you the lowdown on the most successful binary trading strategies and how and when they should be deployed.
ALEX NEKRITIN is CEO and President of TradersChoiceFX, TradersChoiceOptions, and TCForex, one of the largest introductory brokers in the world. Mr. Nekritin has been trading in equities, options, futures, and Forex very successfully for more than a decade. He holds a degree in finance with a concentration in derivative instruments from Babson College in Wellesley, Massachusetts. Alex's work has been featured online at FXStreet.com and TradingMarkets.com.
Weekly options are traded on all major indices, as well as high volume stocks and ETFs. They continue to surge in popularity, accounting for as much as twenty percent of daily options volume. And while existing options strategy can be used with weeklys, they are particularly conducive to premium selling strategies and short-term trades based on a news item or technical pattern. With this timely guide, and its companion video, you'll learn exactly how to use weeklys to make more money from option selling strategies and how to make less expensive bets on short-term market moves.
Written by Russell Rhoads, a top instructor at the CBOE's Options Institute, Trading Weekly Options + Video skillfully explains the unique pricing and behavioral characteristics of weekly options and shows how to take advantage of those unique features using traditional option strategies.The first book and video combination product focused solely on weekly options Outlines the most effective trading strategies associated with weekly options, including taking advantage of the accelerating time-decay curve when an option approaches expiration Filled with the practical, real-world insights of author Russell Rhoads, an expert in this field
Created with both the experienced and beginning option traders in mind, this book and video package will help you make the most of your time trading weekly options.
Note: Website and other supplementary materials are not included as part of eBook file.
"Finally, a book taking a critical look at quantitative finance models, illuminating both their flawed fantasy assumptions as well as the uncritical use of such models on Wall Street, in many cases, leading to billion dollar losses. Pablo Triana knows both the financial industry and the academic community from the inside. A must-read for anyone interested in finance."
—Dr. Espen Gaarder Haug, trader, thinker, and author of Derivatives Models on Models
"A thoroughly readable explanation of the problems that have beset the models and quantitative techniques that have underpinned so much of finance in recent years. If only the bankers had heeded this message a few years before, we might not be in such a big mess today."
—Gillian Tett, Assistant Editor of the Financial Times, overseeing global financial markets coverage, and author of Fool's Gold
"Pablo Triana dismembers quantitative finance, in theory and in practice, with expertise, anger,and an excellent eye for the illuminating anecdote. By the time he has finished marshalling his evidence, his call to replace complex equations with something more like common sense sounds like, well, common sense."
—Edward Hadas, Assistant Editor at Breakingviews.com; and author of Human Goods, Economic Evils: A Moral Approach to the Dismal Science
"Pablo Triana is an entertaining and engaging writer, even on the dry subject of finance theory. His debunking of conventional wisdom is a treat."
—Pauline Skypala, Editor, FTfm, Financial Times
"Triana's book is an unrelenting fusillade of detailed and irrefutable arguments against financial theorems and those who teach them. It should, by rights, spark a revolution in both investment banks and business schools. But, at the very least, it is required reading for anyone who would regulate the finance industry."
—Felix Salmon, Finance Blogger, Reuters
De Weert begins by explaining the risks associated with trading an exotic option before dissecting these risks through a detailed analysis of the actual economics and Greeks rather than solely stating the mathematical formulae. The book limits the use of mathematics to explain exotic options from an economic and risk perspective by means of real life examples leading to a practical interpretation of the mathematical pricing formulae.
The book covers conventional options, digital options, barrier options, cliquets, quanto options, outperformance options and variance swaps, and explains difficult concepts in simple terms, with a practical approach that gives the reader a full understanding of every aspect of each exotic option. The book also discusses structured notes with exotic options embedded in them, such as reverse convertibles, callable and puttable reverse convertibles and autocallables and shows the rationale behind these structures and their associated risks.
For each exotic option, the author makes clear why there is an investor demand; explains where the risks lie and how this affects the actual pricing; shows how best to hedge any vega or gamma exposure embedded in the exotic option and discusses the skew exposure.
By explaining the practical implications for every exotic option and how it affects the price, in addition to the necessary mathematical derivations and tools for pricing exotic options, Exotic Options Trading removes the mystique surrounding exotic options in order to give the reader a full understanding of every aspect of each exotic option, creating a useable tool for dealing with exotic options in practice.
“Although exotic options are not a new subject in finance, the coverage traditionally afforded by many texts is either too high level or overly mathematical. De Weert's exceptional text fills this gap superbly. It is a rigorous treatment of a number of exotic structures and includes numerous examples to clearly illustrate the principles. What makes this book unique is that it manages to strike a fantastic balance between the theory and actual trading practice. Although it may be something of an overused phrase to describe this book as compulsory reading, I can assure any reader they will not be disappointed.”
—Neil Schofield, Training Consultant and author of Commodity Derivatives: Markets and Applications
“Exotic Options Trading does an excellent job in providing a succinct and exhaustive overview of exotic options. The real edge of this book is that it explains exotic options from a risk and economical perspective and provides a clear link to the actual profit and pricing formulae. In short, a must read for anyone who wants to get deep insights into exotic options and start trading them profitably.”
Most forex traders rely on technical analysis books written for stock, futures, and option traders. However, long before computers and calculators, traders were trading naked. Naked trading is the simplest (and oldest) trading method. It's simply trading without technical indicators, and that is exactly what this book is about.
Traders who use standard technical indicators focus on the indicators. Traders using naked trading techniques focus on the price chart. Naked trading is a simple and superior way to trade and is suited to those traders looking to quickly achieve expertise with a trading method.Offers a simpler way for traders to make effective decisions using the price chart Based on coauthor Walter Peters method of trading and managing money almost exclusively without indicators Coauthor Alexander Nekritin is the CEO and President of TradersChoiceFX, one of the largest Forex introducing brokers in the world
Naked Forex teaches traders how to profit the simple naked way!
Trading Binary Options is a strategic primer on effectively navigating this fast-growing segment. With clear explanations and a practical perspective, this authoritative guide shows you how binaries work, the strategies that bring out their strengths, how to integrate them into your current strategies, and much more. This updated second edition includes new coverage of Cantor-Fitzgerald binaries, New York Stock Exchange binaries, and how to use binaries to hedge trading, along with expert insight on the markets in which binaries are available. Independent traders and investors will find useful guidance on speculating on price movements or hedging their stock portfolios using these simple, less complex options with potentially substantial impact.
Binary options provide either a fixed payout or nothing at all. While it sounds simple enough, using them effectively requires a more nuanced understanding of how, where, and why they work. This book provides the critical knowledge you need to utilize binary options to optimal effect.Learn hedging and trading strategies specific to binaries Choose the markets with best liquidity and lowest expenses Find the right broker for your particular binary options strategy Utilize binaries in conjunction with other strategies
Popular in the over-the-counter market, binary options are frequently used to hedge or speculate on commodities, currencies, interest rates, and stock indices. They have become available to retail traders through the Chicago Board Options Exchange and the American Stock Exchange, as well as various online platforms, allowing you the opportunity to add yet another tool to your investing arsenal. Trading Binary Options is the essential resource for traders seeking clear guidance on these appealing options.
Once you have a textbook understanding of money market and foreign exchange products, turn to FX Options and Structured Products, Second Edition, for the beyond-vanilla options strategies and traded deals proven superior in today’s post-credit crisis trading environment. With the thoroughness and balance of theory and practice only Uwe Wystup can deliver, this fully revised edition offers authoritative solutions for the real world in an easy-to-access format. See how specific products actually work through detailed case studies featuring clear examples of FX options, common structures and custom solutions. This complete resource is both a wellspring of ideas and a hands-on guide to structuring and executing your own strategies. Distinguish yourself with a valued skillset by:Working through practical and thought-provoking challenges in more than six dozen exercises, all with complete solutions in a companion volume Gaining a working knowledge of the latest, most popular products, including accumulators, kikos, target forwards and more Getting close to the everyday realities of the FX derivatives market through new, illuminating case studies for corporates, municipalities and private banking
FX Options and Structured Products, Second Edition is your go-to road map to the exotic options in FX derivatives.
For nearly thirty years, professional and individual traders have turned to Trading Systems and Methods for detailed information on indicators, programs, algorithms, and systems, and now this fully revised Fifth Edition updates coverage for today's markets. The definitive reference on trading systems, the book explains the tools and techniques of successful trading to help traders develop a program that meets their own unique needs.
Presenting an analytical framework for comparing systematic methods and techniques, this new edition offers expanded coverage in nearly all areas, including trends, momentum, arbitrage, integration of fundamental statistics, and risk management. Comprehensive and in-depth, the book describes each technique and how it can be used to a trader's advantage, and shows similarities and variations that may serve as valuable alternatives. The book also walks readers through basic mathematical and statistical concepts of trading system design and methodology, such as how much data to use, how to create an index, risk measurements, and more.
Packed with examples, this thoroughly revised and updated Fifth Edition covers more systems, more methods, and more risk analysis techniques than ever before.The ultimate guide to trading system design and methods, newly revised Includes expanded coverage of trading techniques, arbitrage, statistical tools, and risk management models Written by acclaimed expert Perry J. Kaufman Features spreadsheets and TradeStation programs for a more extensive and interactive learning experience Provides readers with access to a companion website loaded with supplemental materials
Written by a global leader in the trading field, Trading Systems and Methods, Fifth Edition is the essential reference to trading system design and methods updated for a post-crisis trading environment.
In this second edition of this bestselling book, Sinclair offers a quantitative model for measuring volatility in order to gain an edge in 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. This new edition includes new chapters on the dynamics of realized and implied volatilities, trading the variance premium and using options to trade special situations in equity markets.Filled with volatility models including brand new option trades for quant traders Options trader Euan Sinclair specializes in the design and implementation of quantitative trading strategies
Volatility Trading, Second Edition + Website outlines strategies for defining a true edge in the market using options to trade volatility profitably.