Option Spread Strategies

Positive Review of Book

Option Spread Strategies is a book that is written some of the foremost experts in the options industry. Anyone looking to take advantage of any market, not just a bull or bear market, should read this book. The "how-to" approach of this book will enable even a novice to participate in what has become THE DERIVATIVE MARKET of choice.

Negative Review of Book

I saw that each strategy had about 30 pages of information, so I thought that the depth of discussion would be quite good. Unfortunately, the first 10 pages of each chapter is simply which options make up the strategy. Investopedia does the same job in 1 page. The next 10 pages shows pictures of the Greeks, which I did not find very useful. Probably the reason why is that there is not a single options chain in the whole book. The values he picks for his Greeks would seem to come out of thin air to the newer trader. Also, the pictures often times do not use the same scaling/pricing as the examples that they are supposed to be describing. Qualitatively, they are good, but it could have been much better if Saliba matched the graphs more tightly to the text. The only parts I liked was the last 10 pages when he talks about adjustments.

I have had a tough time finding books about adjustments, and this one gives a good introduction to adjustments. Sometimes though, his advice is not really advice: "If your trade moves against you, then take appropriate actions to protect your capital." What can I do with that? I thought the exercises at the end were trivial. They test you to see if you understood what you read like "What does a short put vertical made of?" I would have rather seen questions about what to do in different situations, but these only make up 10 or 20% of the questions.

Overall, I would describe Option Spread Strategies as teaching the newer trader about how options work, but not how to trade them successfully. Saliba avoids complicated math and keeps it simple. As other reviewers have noted, he is perhaps a better teacher than others. However, this is really only an overview of option strategies and does not give enough real-world scenarios to equip the reader to make money by trading options.

Author Biography

Anthony J. Saliba has been active in the derivatives market for more than twenty years. He is a member of several financial exchanges and has served on the Board of Directors of the CBOE. His firm, the International Trading Institute, is an acclaimed training organization, reaching thousands of traders worldwide. Saliba was profiled in the best seller Market Wizards.

Table of Contents

1. The Covered-Write
2. Verticals
3. Collars and Reverse-Collars
4. Straddles and Strangles
5. Butterflies and Condors
6. Calendar Spreads
7. Ratio Spreads
8. Backspreads

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