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Positional Option Trading
A detailed, one-stop guide for experienced options traders
Positional Option Trading is a rigorous, professional-level guide on sophisticated techniques from professional trader and quantitative analyst Euan Sinclair. The author has over two decades of high-level option trading experience. He has written this book specifically for professional options traders who have outgrown more basic trading techniques and are searching for in-depth information suitable for advanced trading.
Custom-tailored to respond to the volatile option trading environment, this expert guide stresses the importance of finding a valid edge in situations where risk is usually overwhelmed by uncertainty and unknowability. Using examples of edges such as the volatility premium, term-structure premia and earnings effects, the author shows how to find valid trading ideas and details the decision process for choosing an option structure that best exploits the advantage.
Advanced topics include a quantitative approach for directionally trading options, the robustness of the Black Scholes Merton model, trade sizing for option portfolios, robust risk management and more. This book:
Provides advanced trading techniques for experienced professional traders Addresses the need for in-depth, quantitative information that more general, intro-level options trading books do not provide Helps readers to master their craft and improve their performance Includes advanced risk management methods in option trading No matter the market conditions, Positional Option Trading is an important resource for any professional or advanced options trader.
Positional Option Trading is a rigorous, professional-level guide on sophisticated techniques from professional trader and quantitative analyst Euan Sinclair. The author has over two decades of high-level option trading experience. He has written this book specifically for professional options traders who have outgrown more basic trading techniques and are searching for in-depth information suitable for advanced trading.
Custom-tailored to respond to the volatile option trading environment, this expert guide stresses the importance of finding a valid edge in situations where risk is usually overwhelmed by uncertainty and unknowability. Using examples of edges such as the volatility premium, term-structure premia and earnings effects, the author shows how to find valid trading ideas and details the decision process for choosing an option structure that best exploits the advantage.
Advanced topics include a quantitative approach for directionally trading options, the robustness of the Black Scholes Merton model, trade sizing for option portfolios, robust risk management and more. This book:
Provides advanced trading techniques for experienced professional traders Addresses the need for in-depth, quantitative information that more general, intro-level options trading books do not provide Helps readers to master their craft and improve their performance Includes advanced risk management methods in option trading No matter the market conditions, Positional Option Trading is an important resource for any professional or advanced options trader.
- GenresFinanceMathematics
320 pages, Hardcover
Published September 1, 2020
47 people are currently reading
393 people want to read
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Displaying 1 - 11 of 11 reviews
January 19, 2021
It is very rare for a good trader to actually write a trading book. Writing a book well costs time, and if you are a good trader, your time is expensive. I don't know how Mr. Sinclair manages to sqeeze the time to write this, but this book is the rare one.
This book covers quantitative option trading similar to author's "Volatility trading". Like the previous book, the author focuses on "trading" i.e., how we to idenfity an edge to trade on, how to engineer a trading strategy to harvest the edge, and how to manage the risk and uncertainty of things we don't have an edge on. The mathematics in this book is highly practical. The author cares about how useful the model helps trading, but not how correct or beautiful the model is. On the other hand, the book is highly analytical, the way the author approaches trading provide insights beyond option trading or even quantitative trading, but in general trading as a decision making process.
Highly recommend for anyone who trades.
This book covers quantitative option trading similar to author's "Volatility trading". Like the previous book, the author focuses on "trading" i.e., how we to idenfity an edge to trade on, how to engineer a trading strategy to harvest the edge, and how to manage the risk and uncertainty of things we don't have an edge on. The mathematics in this book is highly practical. The author cares about how useful the model helps trading, but not how correct or beautiful the model is. On the other hand, the book is highly analytical, the way the author approaches trading provide insights beyond option trading or even quantitative trading, but in general trading as a decision making process.
Highly recommend for anyone who trades.
November 8, 2021
This was an amazing read. Full of information and also surprisingly entertaining. It was my first introduction to Euan Sinclair, and I really hope that he writes more.
As far as options go, this is an advanced book that happily delves into the nitty gritty mathematics behind the curtain, but it does so with a purpose--to teach you how to take advantage of the data that you see and to learn its limitations. However, this book is completely readable and extremely helpful even if you just skim over the formulas as I did--my calculus is pretty rusty, and my knowledge of statistics is shallow.
Definitely recommend this one for anyone with some experience trading options who is looking to learn more.
As far as options go, this is an advanced book that happily delves into the nitty gritty mathematics behind the curtain, but it does so with a purpose--to teach you how to take advantage of the data that you see and to learn its limitations. However, this book is completely readable and extremely helpful even if you just skim over the formulas as I did--my calculus is pretty rusty, and my knowledge of statistics is shallow.
Definitely recommend this one for anyone with some experience trading options who is looking to learn more.
October 12, 2021
Highly recommend for anyone looking to trade options without dynamically hedging. This is so far the best treatment on the subject that I've found, and is VERY well written. As with his other books, it could benefit from a good proofreader, but an intelligent reader shouldn't have any problem getting past most of the small errors.
November 6, 2021
As with Volatility Trading, Sinclair offers his characteristically practical perspective on option trading – backed by plenty of academic evidence. Positional Option Trading stands out because it explores topics seldom covered in other books on options: factor models to predict option returns, empirical investigations of the PnLs of various structures when estimates are uncertain, and how to use options to capture directional bets.
An entire chapter is devoted to a list of potential edges – it goes without saying that it is very rare for authors to explicitly provide these. I think the only reason Sinclair can get away with it is that capturing edges in the option space is nontrivial.
As the introduction warns, this is a more advanced textbook and should only be read if you're conversant with option greeks.
An entire chapter is devoted to a list of potential edges – it goes without saying that it is very rare for authors to explicitly provide these. I think the only reason Sinclair can get away with it is that capturing edges in the option space is nontrivial.
As the introduction warns, this is a more advanced textbook and should only be read if you're conversant with option greeks.
March 18, 2023
This book is good, but I'm not sure if it's a good idea for you to take the time to read it.
It discusses several persistent statistical anomalies in the options market. Potentially, these anomalies provide an opportunity to make money trading.
However, I want to draw your attention to two things. First, these anomalies are pretty small. Second: the planet's most intelligent people compete with you for trading profits. Instead of working on cancer cures and things like that, they go out of their way to deprive you of your money.
By betting with options, you implicitly declare that you have a better understanding of option pricing than seasoned market makers, including Citadel. Try to find out what percentage of all options sold are written by the Citadel. Perhaps the results will surprise you.
Stock market professionals subtly encourage retail traders to use options instead of stocks. Are they doing it out of altruism? Of course not. Their rationale is that the bid-ask spread in options is considerably larger than in spot stocks. With every trade, you cross the bid-ask spread at least once. Often, you do it twice: when you take a position and exit it.
I recommend that retail traders seek out simpler avenues for profit generation than engaging in option trading.
It discusses several persistent statistical anomalies in the options market. Potentially, these anomalies provide an opportunity to make money trading.
However, I want to draw your attention to two things. First, these anomalies are pretty small. Second: the planet's most intelligent people compete with you for trading profits. Instead of working on cancer cures and things like that, they go out of their way to deprive you of your money.
By betting with options, you implicitly declare that you have a better understanding of option pricing than seasoned market makers, including Citadel. Try to find out what percentage of all options sold are written by the Citadel. Perhaps the results will surprise you.
Stock market professionals subtly encourage retail traders to use options instead of stocks. Are they doing it out of altruism? Of course not. Their rationale is that the bid-ask spread in options is considerably larger than in spot stocks. With every trade, you cross the bid-ask spread at least once. Often, you do it twice: when you take a position and exit it.
I recommend that retail traders seek out simpler avenues for profit generation than engaging in option trading.
July 31, 2024
By far my favorite book on options - intermediate to advanced level. Great balance of theory, intuition, behavioral finance - 5 stars
November 4, 2023
"Positional Option Trading: An Advanced Guide" has been a game-changer for me as a beginner options trader. Euan Sinclair, with his extensive trading background, has crafted a guide that goes beyond the basics and dives into the nuanced techniques that professional traders seek.
This book is a masterclass in finding and leveraging a valid edge in the often unpredictable options market. Sinclair's discussion on the volatility premium, term-structure premia, and earnings effects has revolutionized the way I approach trading ideas. His guidance on selecting the optimal option structure to capitalize on these edges is invaluable.
What I admire most is the book's quantitative stance on directionally trading options and its critical examination of the Black Scholes Merton model's robustness. The sections on trade sizing and risk management have not only enhanced my strategic planning but also fortified my portfolio against volatility.
For any trader looking to refine their strategy and elevate their market performance, Sinclair's "Positional Option Trading: An Advanced Guide" is a must-read. It's not just a book; it's a professional toolkit that has empowered me to navigate the complexities of advanced options trading with confidence.
This book is a masterclass in finding and leveraging a valid edge in the often unpredictable options market. Sinclair's discussion on the volatility premium, term-structure premia, and earnings effects has revolutionized the way I approach trading ideas. His guidance on selecting the optimal option structure to capitalize on these edges is invaluable.
What I admire most is the book's quantitative stance on directionally trading options and its critical examination of the Black Scholes Merton model's robustness. The sections on trade sizing and risk management have not only enhanced my strategic planning but also fortified my portfolio against volatility.
For any trader looking to refine their strategy and elevate their market performance, Sinclair's "Positional Option Trading: An Advanced Guide" is a must-read. It's not just a book; it's a professional toolkit that has empowered me to navigate the complexities of advanced options trading with confidence.
March 19, 2023
A very good educational book. The author explains the strategies in a plain, basic, easy to understand way and demonstrates a good skill at explanation a educational subject in words. I found this book very easy to understand and follow. The structure of the book is very good and in the beginning the strategies are aimed at those with less experience of trading in options whilst the further you go through the book the strategies because better suited for those with a higher level of experience. This book is very helpful and increases the skills of the reader. The only this that disappointed me was the book cover which the writer could have used a bit more imagination. But in conclusion this book is a very good education book and if you are interested in learning option trading this is one of the better books on the subject. Most suitable for those with a decent level of experience in the subject.
March 12, 2022
It is not the best work of Euan. An average book on options trading. Chapters could have been in more details with better explanations. 250 pages book with mere simulation results that don’t add values, and book has NO CODE even for simulations to try it out for yourself. It would have been great if, along with the simulation-based P/L results, there are back-testing results using historical data.
Chapter 5: “Finding Trades with Positive Expected Value” is the only decent chapter of the book that gives you insights, actionable trading strategies, and some ideas to back-test.
For details you can visit: https://fincharya.com/2022/03/trading/
Chapter 5: “Finding Trades with Positive Expected Value” is the only decent chapter of the book that gives you insights, actionable trading strategies, and some ideas to back-test.
For details you can visit: https://fincharya.com/2022/03/trading/
March 23, 2023
Learned a lot from this book, and it doesn't really waste many words. Definitely not worth reading unless you have a background in option theory, but if you do, definitely worth reading.
August 6, 2023
Serious read
I read such book first time that will help in trading. Re reading . Option traders must try it .
I read such book first time that will help in trading. Re reading . Option traders must try it .
Displaying 1 - 11 of 11 reviews