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Financ Mark Portf Manag (2011) 25:339340 DOI 10.1007/s11408-011-0160-3
B O O K R E V I E W
Published online: 8 July 2011 Swiss Society for Financial Market Research 2011
The focus of Option Trading, as its title correctly states, is on the practical possibilities of gaining an edge in everyday option trading. Combining academic research and practical expertise, the book provides its readers with basic quantitative approaches to volatility measurement, hedging, money management, and trade evaluation. It is recommended to those seeking a quick and practical, yet thorough, introduction to the option trading profession.
Euan Sinclair divides his book into roughly three parts. He starts with a thorough introduction to options from a conceptual and historical viewpoint. The second part is devoted to pricing concepts and relationships. In the last section, the reader is introduced to basic trading strategies.
Interestingly, in Chapter 1, the author makes a contribution to the ongoing political debate on the necessity and social desirability of derivative markets. He provides a short survey of the history of options and shows that the basic principles behind them have longer history than stocks or bonds. Contrary...