The Mathematics of Options : Quantifying Derivative Price, Payoff, Probability, and Risk

Description

This book is written for the experienced portfolio manager and professional options traders. It is a practical guide offering how to apply options math in a trading world that demands mathematical measurement. Every options trader deals with an array of calculations: beginners learn to identify risks and opportunities using a short list of strategies, while researchers and academics turn to advanced technical manuals. However, almost no books exist for the experienced portfolio managers and professional options traders who fall between these extremes. Michael C. Thomsett addresses this glaring gap with The Mathematics of Options, a practical guide with actionable tools for the practical application of options math in a world that demands quantification. It serves as a valuable reference for advanced methods of evaluating issues of pricing, payoff, probability, and risk. In his characteristic approachable style, Thomsett simplifies complex hot button issues—such as strategic payoffs, return calculations, and hedging options—that may be mentioned in introductory texts but are often underserved. The result is a comprehensive book that helps traders understand the mathematic concepts of options trading so that they can improve their skills and outcomes. Front Matter ....Pages i-xxii Trading Goals and Objectives (Michael C. Thomsett)....Pages 1-29 The Role of Fundamental and Technical Analysis (Michael C. Thomsett)....Pages 31-53 Pricing of the Option (Michael C. Thomsett)....Pages 55-78 The Dividend Effect (Michael C. Thomsett)....Pages 79-97 Return Calculations (Michael C. Thomsett)....Pages 99-123 Strategic Payoff: The Single-Option Trade (Michael C. Thomsett)....Pages 125-160 Strategic Payoff: Spreads (Michael C. Thomsett)....Pages 161-196 Strategic Payoff: Straddles (Michael C. Thomsett)....Pages 197-230 Probability and Risk (Michael C. Thomsett)....Pages 231-254 Option Pricing Models (Michael C. Thomsett)....Pages 255-267 Alternatives to Pricing Models (Michael C. Thomsett)....Pages 269-284 Back Matter ....Pages 285-331