My 20 Best Trading Books & Stock Market Books Of All Time
4 stars based on
The options tool of choice among traders and investors around the world. That's not immediately pejorative, though Wall Street has gotten a very, very bad reputation of late. After all, odds, probabilities, are the stuff of everyday life. We don't think about them consciously. You and I cross the street -- now -- because we see the odds of getting hit are nil.
We didn't cross 10 seconds ago because we saw two semi's roaring towards us. We don't even think about these as "probabilities," per se. And for those who do think about probabilities, and in connection with financial markets, from a vast resource of education preferably Phd and erudition and experience, the rewards can be staggering, as in a million per minute.
Quant trading started in -- wait for it -- Las Vegas, where odds-making not image, sorry Andre, our favorite LV homebay is everything.
This is where card counting got its start. Card counting is just probability analysis, on the fly. And card-counting, writ large, is quant trading. Card counting pioneer, Ed Thorp, was the progenitor of quant trading. Thorp begat Ken Griffin, Citadel.
And on and on it went and goes. Some of the other featured players here include: Author Patterson wields a deft pen, and never fails to grab the reader at the end of a section or chapter: To peel back the layers of secrecy and expose the histories, successes, failures, personal peccadilloes -- the whole story of 'the quants' -- is a very great journalistic accomplishment.
THE QUANTS is not an indictment, per se, of the entire enterprise of quantitative trading, but does indict extreme leverage and the perils it presents. Interestingly, Patterson follows the founder of the practice, Ed Thorp, who turns away from over-leverage, and generates excellent returns without it. So, as per usual with Wall Street, we come back to the question of greed.
Maybe like alcohol or fire or nuclear energy? A little bit, the right place, the right time. To overdo here is to destroy, and the problem is, we're all on the hook for it. It is, quite simply, a must read. Talk about "destroying Wall Street", as we were reading this volume, the Dow experienced the infamous May 6,"Flash Crash," for which many explanations have been offered, but the truth?
We are still waiting; Wall Street doesn't tell all its secrets, not even to Mr. As author Patterson wraps it up: PPS We received from a Chicago quant this youtube. Another cautionary quant tale, a good one, told in large part by a quant-turned-oysterman he lives off his interest and we recommend it to you: Sarkett, Developer, Option Wizard Online "The Option Wizard Trading Method presents a series of common-sense rules for trading -- from analysis methods to the proper considerations for purchasing or selling options.
These, coupled with a risk management system, should provide an excellent approach to trading options. My experience from many, many years in the business: There is a different mindset between them, and a great gulf between them. It takes capital and it takes patience to succeed being on the sell side. Option Wizard software and the publication Option Wizard Trading Method magnifies the sell-side possibilities with its price-time decay table and mindset to "not neglect the short side.
We commend both to the neophyte as well as the experienced trader. Explains how to profit when the product 'never stops dancing. However, there is much worthwhile information in the Option Wizard Trading Method. Will sharpen your trading vision.
Edward Allen Toppel, author, Zen in the Markets. It is the only program available to the public that easily calculates implied volatility and percent-to-double. This is poetry for Excel. It offers off-the-beaten track insights into a number of areas: I recommend this one highly.
The Option Wizard Trading Method is one of the most enjoyable technical trading books to read, and most valuable to learn fromthat I've come across. The insights here -- especially the emphasis on volume and trend -- here are valuable not only to the novice, but to the seasoned as well. Free access on sfomag. All in all, five stars, highly recommended. How selling options can lead to stellar returns in bull and bear markets by Cordier and Gross We like this text a ton more than the Jabbour because it has a point of view, briefly put: It shuns any discussion of the greeks in favor of a brief discourse of the ideas behind the greeks, i.
This anathema for options analytics permits a degree of subjectivity into the mix that may not prove helpful in the long run. The authors prefer selling moderate vols to high or low vols. But then they contradict. I am large; I contain multitudes" said the poet. Sometimes they head straight for the madness, and sell high vols on screaming futures, e.
Two strategies are favored: For risk management, the authors cite 4 points: When sold option becomes worth 2x premium received, cover. One of the top condor traders in the US has recently adopted this, among other rules. Set exit point on value of underlying, based on a support-resistance, or b when underlying hits short strike. Yes, we have a few. The diatribe against math wasn't helpful, especially when most brokerage platforms now handle all the math anyone could want, so why rail against it?
The number cruncher out there may cringe, but how about simply looking at a price charge of the underlying? The software crunches the numbers. The anti-intellectual posture of "you don't need to know volatility" is more the rant of a broker remember, the author is one than an options guru. Also, the fictitious conversations with one's broker makes the text feel somewhat dated since most hard-core trading has gone electronic vs telephonic at places like optionsXpress, thinkorswim, Interactive Brokers, and the like, and since the ETRADEs of the world charge a premium for the privilege of reciting your order to your faithful broker.
The ending summation is useful, and we'll overlook the fairly blatant pitch to hire the author firm's as brokers. All in all, some useful street smarts here, and they make this book worthwhile.
This is an at expiration analysis of options strategies. There is no mention of Greeks, word is not found in the index, nor is delta, gamma, vega, theta, rho. No mid-trade adjustment considerations, adjustment here means: There is lots of discussion of ratio spreads, which is perhaps the sole strength of the book, and stock positions.
No in-depth treatment of condors, double diagonals, double calendars. No mention of tax implications of selling stock. Pedestrian presentation, beginner level. Savvy reviewers on Amazon are on the case, calling it variously, "solid," "disappointing," "repetitive. But that thick tome occasionally left out a few points complete novices might not pick up. So if you trade stock, long options, or spreads, and want to figure out what to do to limit risk, this will explain things clear and simple language.
My high expectations of it didn't materialize. I cannot recommend this book to anyone who is serious about option trading since it does not discuss greeks and how you can balance your portfolio with them. If you spend time and research components of option pricing and greeks this book becomes just a common sense repeated a hundred times. Tuesday, May 20, This is a very basic, plain vanilla text that will provide a sound introduction to this practice. The book does not overpromise, which is just as well.
For example, the section on adjustments is sound, walking the reader through one's prospective courses of action as the underlying moves up, down and sideways, and in so doing, illustrating that there is really no free money to be had in the options markets, every strategy or adjustment involves a tradeoff of some kind. We have a few caveats: What exactly the titular "new insights" were, we are not entirely sure.
The McMillan byline is yes, that of leading options educator Larry McMillan, whose long-published texts are the foundation of options education, so you can be sure this is a thoroughgoing and comprehensive presentation.
Beginner to intermediate level, worth reading. Thursday, June 19, As we are all CEOs of our own lives, there is no one who wouldn't profit from a close read, and re-read, of this excellent volume, including the latest fallen, e.
Many great quotes, Eastern wisdom to Broadway, telling anecdotes and insightful studies contained herein, but more than just anecdotes, the authors lay out a five-step blueprint on making a comeback: Sarkett, author, " Extraordinary Comebacks: Ever wonder why doctors, lawyers, dentists and other highly trained, brilliant professionals make such bad investors and traders?
We've spoken with hundreds. The human, no matter how smart, is not hard-wired for investment success. Peterson, a medical doctor psychiatristmanaging partner of Market Psychology Consulting, and former trader. He is a pioneer in the field of neuroeconomics -- the study of how humans manage their financial affairs.