Volatile Markets Made Easy E-Book by Guy Cohen


Categories: Business & Economics, Investing
Author ‏: Guy Cohen
Year: 2009
Edition: 1
Language: English
Pages: 353
File: PDF, 9.89 MB
Supported on ‏: Desktop, Laptop & Mobile


Volatile Markets Made Easy: Trading Stocks and Options for Increased Profits.

I read this book after his earlier book “Options Made Easy”, which paved the way to get more out of this book. In addition to the well-presented standard fare in options books, the author also addresses the psychological aspects which can be half the battle when trading. The examples presented were beneficial and, as a learner, the more the better. Again, a good read coupled with his earlier book.
Although it is not necessary for an option trader to understand the mathematics behind the option models used, the author does include equations that are quite helpful in my opinion. The reason for this is that any trading strategy is used more appropriately if the trader understands the math behind it.
I have had better profit selling options when volatility is high and moving lower and buying them when volatility is low and expected to go higher.
His statement “if volatility in the market continues to rise, then buying these options will be rewarded by higher premiums, provided the implied volatility of the options follows suit” seems to advocate buying options when volatility is high and expected to go higher. In my experience, this is a dangerous strategy since if volatility collapses the option premiums will collapse with it and you are likely to face a loss quickly. This is especially true if you bought an option during a period of high volatility.
Also, I wished the author mentioned the effect of lopsidedness in open interest between puts and calls on the likelihood of a specific option expiring worthless. I read this in another book and was amazed at the accuracy of this approach in predicting whether the puts or calls are more likely to expire worthlessly.
Even with the minor critical comments, the book is still worth reading

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