A top options trader details a practical approach for pricing and trading options in any market condition The options market is always changing, and in order to keep up with it you need the greeks delta, gamma, theta, vega, and rho which are the best techniques for valuing options and executing trades regardless of market conditions. In the Second Edition of Trading Options Greeks, veteran options trader Dan Pasarelli puts these tools in perspective by offering fresh insights on option trading and valuation. An essential guide for both professional and aspiring traders, this book explains the greeks in a straightforward and accessible style. It skillfully shows how they can be used to facilitate trading strategies that seek to profit from volatility, time decay, or changes in interest rates. Along the way, it makes use of new charts and examples, and discusses how the proper application of the greeks can lead to more accurate pricing and trading as well as alert you to a range of other opportunities. Completely updated with new material Information on spreads, put-call parity and synthetic options, trading volatility, and advanced option trading is also included Explores how to exploit the dynamics of option pricing to improve your trading Having a comprehensive understanding of the greeks is essential to long-term options trading success. Trading Options Greeks, Second Edition shows you how to use the greeks to find better trades, effectively manage them, and ultimately, become more profitable.

A top options trader details a practical approach for pricingand trading options in any market conditionThe options market is always changing, and in order to keep upwith it you need the greeks--delta, gamma, theta, vega, andrho--which are the best techniques for valuing options andexecuting trades regardless of market conditions. In the SecondEdition of Trading Options Greeks, veteran optionstrader Dan Pasarelli puts these tools in perspective by offeringfresh insights on option trading and valuation.An essential guide for both professional and aspiring tradersthis book explains the greeks in a straightforward and accessiblestyle. It skillfully shows how they can be used to facilitatetrading strategies that seek to profit from volatility, time decayor changes in interest rates. Along the way, it makes use of newcharts and examples, and discusses how the proper application ofthe greeks can lead to more accurate pricing and trading as well asalert you to a range of other opportunities.* Completely updated with new material* Information on spreads, put-call parity and synthetic optionstrading volatility, and advanced option trading is alsoincluded* Explores how to exploit the dynamics of option pricing toimprove your tradingHaving a comprehensive understanding of the greeks is essentialto long-term options trading success. Trading Options GreeksSecond Edition shows you how to use the greeks to find bettertrades, effectively manage them, and ultimately, become moreprofitable.

ForewordPrefaceAcknowledgmentsPart I The Basics of Option GreeksChapter 1 The BasicsContractual Rights and ObligationsETFs, Indexes, and HOLDRsStrategies and At-Expiration DiagramsChapter 2 Greek PhilosophyPrice vs. Value: How Traders Use Option-Pricing ModelsDeltaGammaThetaVegaRhoWhere to Find Option GreeksCaveats with Regard to Online GreeksThinking GreekNotesChapter 3 Understanding VolatilityHistorical VolatilityImplied VolatilityExpected VolatilityImplied Volatility and DirectionCalculating Volatility DataVolatility SkewNoteChapter 4 Option-Specific Risk and OpportunityLong ATM CallLong OTM CallLong ITM CallLong ATM PutFinding the Right RiskIt's All about VolatilityOptions and the Fair GameNoteChapter 5 An Introduction to Volatility-Selling StrategiesProfit PotentialChapter 6 Put-Call Parity and SyntheticsPut-Call Parity EssentialsAmerican Exercise OptionsSynthetic StockSynthetic Stock StrategiesTheoretical Value and the Interest RateA Call Is a PutNoteChapter 7 RhoRho and Interest RatesRho and TimeConsidering Rho When Planning TradesTrading RhoNotesChapter 8 Dividends and Option PricingDividend BasicsDividends and Option PricingDividends and Early ExerciseInputting Dividend Data into the Pricing ModelPart II SpreadsChapter 9 Vertical SpreadsVertical SpreadsVerticals and VolatilityThe Interrelations of Credit Spreads and Debit SpreadsBuilding a BoxVerticals and BeyondNoteChapter 10 Wing SpreadsCondors and ButterfliesTaking FlightKeys to SuccessGreeks and Wing SpreadsDirectional ButterfliesConstructing Trades to Maximize ProfitThe Retail Trader versus the ProNotesChapter 11 Calendar and Diagonal SpreadsCalendar SpreadsTrading Volatility Term StructureDiagonalsThe Strength of the CalendarNotePart III VolatilityChapter 12 Delta-Neutral TradingTrading Implied VolatilityDirection Neutral versus Direction IndifferentDelta NeutralTrading Implied VolatilityChapter 13 Delta-Neutral TradingTrading Realized VolatilityGamma ScalpingArt and ScienceGamma, Theta, and VolatilityGamma HedgingSmileys and FrownsChapter 14 Studying Volatility ChartsNine Volatility Chart PatternsNotePart IV Advanced Option TradingChapter 15 Straddles and StranglesLong StraddleShort StraddleSynthetic StraddlesLong StrangleShort StrangleNoteChapter 16 Ratio Spreads and Complex SpreadsRatio SpreadsHow Market Makers Manage Delta-Neutral PositionsTrading SkewWhen Delta Neutral Isn't Direction IndifferentManaging Multiple-Class RiskChapter 17 Putting the Greeks into ActionTrading Option GreeksChoosing between StrategiesManaging TradesThe HAPI: The Hope and Pray IndexAdjustingAbout the AuthorIndex