Basic Option Volatility Strategies: Understanding Popular Pricing Models

Now you can learn directly from Sheldon Natenberg! In this unique multimedia course, Natenberg will explain the most popular option pricing strategies. Follow along at this trading legend walks you through the calculations and key elements of option volatility in this video, companion book, and self–test combination. GET THE FULL IMPACT OF EVERY WORD OF THIS TRADERS′ HALL OF FAME PRESENTATION. You’ll learn: Implied volatility and how it is calculated, so you can find the best positions; What assumptions are driving an options pricing model to be ahead of the trade; Proven techniques for comparing price to value to increase your number of winning trades; How you can use probability to estimate option prices to increase trading income. Spending time with a trading legend is usually a dream for most traders, but this is your opportunity to get the inside tactics of one of the most sought–after educators in options. With the personal touch of his presentation, Natenberg’s educational tool gives all traders, beginner to advanced, access to the powerful insights that can bring ongoing option trading success.

Publisher′s Preface vii How to Use this Book ix Meet Sheldon Natenberg xi Chapter 1 The Most Important Tool for Any Options Trader 1 Chapter 2 Probability and Its Role in Valuing Options 9 Chapter 3 Using Standard Deviation to Assess Levels of Volatility 35 Chapter 4 Making Your Pricing Model More Accurate 57 Chapter 5 The Four Types of Volatility and How to Evaluate Them 69 Chapter 6 Volatility Trading Strategies 83 Chapter 7 Theoretical Models vs the Real World 109 Appendix A Option Fundamentals 115 Appendix B A Basic Look at Black–Scholes 129 Appendix C Calendar Spread 133 Appendix D Greeks of Option Valuation 137 Appendix E Key Terms 141 Index 149

Sheldon Natenberg began his trading career in 1982 as an independent market maker in equity options at the Chicago Board Options Exchange. In 1985, he began trading commodity options as an independent floor trader at the Chicago Board of Trade. He is now Director of Education for Chicago Trading Company and is highly sought–after lecturer at professional training seminars both here and abroad.