Exchange-risk Books

John Merril sets up three portfolios,each holding stocks bonds and cash.He takes the reader thru every bull and bear market from 1926 thru 1997. Many authors of investment books avoid the investment history of the 1930s and other prolonged bear markets but Merril wants the reader to realize the risk and the reward that comes whith investing.I would urge anyone who has a 401k plan or Ira to purchase this book. Mr.Merril may have some different views then others when it comes to indexing and foreign investing but explains his views honestly.This is a great book and I don`t know why since it`s published over a year ago that no one has reviewed it.This is a book that should be updated every year.

Although this book looks like one of those self-gratifying fantasies at first sight, it actually offers much much more than those watered-down stock market tales like "Wall Street" and "The Boiler Room". The reader is taken through the career of a City professional from his humble beginning to the near height of his life. The tales told about the inner workings of brokerage firms are gripping and sharp. The turn of events seems somewhat convenient, one cannot help but has the idea that the main point about writing this book is not about satisfying fantasies, but to reveal the true nature of the stock market and how it affects those who are dumb enough to play it blindly. This book reveals rare information that one will not find in any other self-help investment book. Read it wisely and carefully, but only after you have some fundamental understanding of the stock market. The insights you gain in reading this book will take you through a rollercoaster of ideas. In the end, you will find yourself coming to a conclusion that is much the same as you have suspected: Stock market is all about playing the game.

I'm impressed with what a good job Vijay Singal has done. Beyond the Random Walk is very clear and thorough, turning what is normally overly academic research/text into easy to follow prose and investor-friendly instructions. I'm reading a library copy now, but want to have my own copy--a rarity for me.

Vijay has written a very lucid account of different pricing anomalies and how to take advantage of them. His section on momentum-trading strategies was particulary interesting to me. Sector-fund momentum trading strategies have been shown to beat the market averages ( Hulbert's Financial Digest has reviewed sector fund newletters and thinks there's statistical evidence of superiority in their total returns versus an unmanaged index). It's well worth considering as an investor if you're willing to invest a little time. I've based a website on this approach, topsectors.com, so I'm quite convinced it's a strategy that hasn't been fully exploited today and so pricing anomalies exist that the average investor can use to their advantage.

This is a very interesting and clearly written book. From an academic standpoint, it effectively digs some dent in the Efficient Market Hypothesis. The author addresses ten classic situations, some of them well known, when markets are not efficient.

However, the author does not make a convincing case that retail investors can exploit these inefficiencies efficiently. In other words, the anomalies the author depicts amount to separate trading strategies which should potentially help you achieve the "buy low - sell high" optimum. However, these trading strategies are associated with much higher transaction costs and taxes than a buy-and-hold strategy of an index fund. Additionally, some of these strategies are very labor intensive and information intensive. These are added costs. Finally, these strategies will cause you to cash out of the market frequently. The holding of cash balances will further reduce your return compared to investors who remain fully invested.

When all is said and done, will you come out ahead exploiting these market anomalies after you factor all added costs? The author stated that he "generally" does come out ahead of the market. However, he does not support this vague statement with any documentation. Also, he adds that going forward his strategies may be less effective because of ever changing market conditions. Thus, once a market anomaly is exploited by a few investors, the market's ever evolving efficiency erases this anomaly.

Although the book is very interesting, it is no substitute to sound investment strategies based on the Efficient Market Hypothesis. It is a far safer and easier to profit from the market's overall efficiency than to attempt to profit from its few and fleeting marginal inefficiencies.

If you are interested in this subject, I strongly recommend the classics by Burton Malkiel: "A Random Walk Down Wall Street" and "The Random Guide to Investing." I also strongly recommend John Paulos excellent "A Mathematician Plays the Stock Market." These books all suggest that you are better off focusing your energy on proper asset class diversification that reflects your risk tolerance. And, in turn invest for the long term through index funds of these respective asset classes.

I am a (successful) practitioner who has been exploiting mispricings in the market for more than 10 years - in bad times and good times.

This is an excellent book - readable, comprehensive, and up to date. It is not a fool's book but the ideal book for an intelligent person. It describes the risks associated with each strategy. I particularly like the strategy with Fidelity Select Funds.

I hope the book becomes popular so that it can be reissued every few years with new insights and new data.

This is definetly one of the better written books on the subject. Singal presents several "market anomalies" and discusses strategies as to how to benefit from them. However, most of them have holding periods of a couple of days to a few weeks at the most. A long-term investor may not find the strategies mentioned here very useful. Of particular appeal to mid-to-long term investors may be the discussion on SP500 additions and deletions, and mutual fund pricing. It may offer some tips on when to committ additional funds to mutual funds. However, the increased pressure on market timers and related activities, increasing redemption fees, trading costs, tax implications and the sheer amount of time required to monitor the strategies, the techniques of the author provide for good academic discussion and not as much as practical "tips". Nevertheless, the market situations, suggested techniques, evidence and possible explanations, citations are well presented and logically organized. A must-read for traders and investors alike, though for different reasons.

Alex Lipton's Mathematical Methods for Foreign Exchange: A Financial Engineer's Approach is a comprehensive study of models used in practice for the pricing and hedging of derivatives. Despite the focus on foreign exchange, the methods detailed in the work go far beyond FX to apply to a number of other asset classes (e.g. equity, commodity, and some fixed income and credit derivatives). The core of the book applies the theory of parabolic partial differential equations to solve a vast number of problems that arise in the pricing of European and path-dependent options. It is difficult to find all the methods covered in the book treated in one place, and many are not documented elsewhere.

The emphasis is on a mathematical treatment that highlights the structure of the problems at hand, not on numerical solutions to these problems. Important though numerical solutions are in their own right, they are far less illuminating in understanding the problem itself, and can easily be obtained with the appropriate mathematical tools, developed in this book, at one's disposal. The value of the work is further enhanced by the meticulous referencing and extensive bibliography that it provides.

Having worked in the industry as a quant in foreign exchange, and in academia, I can strongly recommend this book to anyone interested in a rigorous mathematical treatment of the problems arising in the pricing and hedging of derivatives.

A highly detailed mathematical book on exchange rates. I'm not qualified to review the quality of the work, but just be clear that this is high level stuff only appropriate to quants.

Dear Mr. Lipton,

I will try to write from my hearth.

It is beyond any doubt that you have a deep understanding and knowledge about fx option pricing models. However, I feel that you are not sharing that knowledge with us, as a good teacher would do.

What is missing in your book is some fine examples of the complete procedure, for an example for the Heston model. The best book I have read on this topic is "Inside Volatility Arbitrage". The only thing missing in that book, is the code for actual parameter optimization. It is mentioned that the optimization is done with Powels method from Numerical Recipes in C, however how the initial solution is guessed is not specified. Even still one can try brute force searching in parameter space as a initial guess. Other methods exist also. Either way, "Inside Volatility Arbitrage" is a fine book on this topic.

I'm sure sure that you are extremely well acquainted with the numerical procedure and difficulties in option valuation, therefore because that part is really missing in your book I must conclude that you are not really sharing your deep knowledge with us, trough your book. Therefore I must value your book with only 2 stars.

With Kind Regards,
Aleksandar Mojancevski

I have been using this book since I was a graduate student and, now working as a quant, I always keep it handy. The various techniques I have learned from this book helped me to solve a lot of problems related to financial engineering which I have encountered in my both academic and professional career. The book covers a lot of advanced material, most of which is original and unique, starting from pricing path-dependent options in the discrete binomial model up to pricing path-dependent volatility products under stochastic volatility models. I will briefly go through the content of the book and make appropriate comments.

Chapters 1- 4) The author introduces the sufficient background which is necessary to solve financial problems arising by pricing and risk-managing of derivative securities, in particular, the stochastic calculus and backward/forward partial differential equations (PDE). By itself these topics are nowadays extremely broad and cannot be fully developed even within a series of books. In this book, only important results are given (and references for more specific texts are provided); these results will further be applied throughout the book and they include: basic properties of Brownian motion, connection between the diffusion problems and solutions to backward and forward Kolmogoroff equations, Ito's lemma, solution of SDE-s by discretization, solving PDE-s with Laplace and Fourier transforms, eigenfunction expansion.

In chapter 4, the author does tangentially mention about numerical solutions of PDE-s. Here, it is important to note that PDE numerical solution methods are outside of the scope of this book, although the author almost always presents the problem as a solution to certain PDE so a relevant PDE solver can always be applied, the main scope of this book are analytical methods for solving PDEs. However, the author does illustrate the Crank-Nicolson and Crayg-Sneyd ADI scheme, which are the methods of choice (whether robust or not) at the majority of Wall Street firms.

Chapters 5-6) The author fully develops the binomial model and carefully explains no-arbitrage pricing principles. What is important and, perhaps, is unique in his treatment of the binomial model is that he describes extensions of the model to the so-called implied trees, and, which is very important for pricing exotic options in the binomial model, he describes the augmentation principle to price path-dependent options, including American, asian, barrier, and lookback options.

Chapters 7-9) The author studies continuous time dynamics for FOREX evolution (although by no means is the treatment specific only to FOREX) and pricing principles for European options. He applies various techniques from applied mathematics to solve a variety of pricing problems, including multi-dimensional problems, in an efficient way. These highly useful techniques include non-dimensionalization, Laplace and Fourier transforms, approximations, Green's functions, or the state-price densities in the jargon of finance texts, which are extremely important for solving problems (and building analytics) in their generality .

Chapter 10) It is well known that often the pure log-normal model is not satisfactory in practice for pricing and risk-management of derivative deals. To go beyond the Black-Scholes model, the author introduces and discusses a number of possible alternative models for FOREX evolution and shows how to treat these alternative models efficiently using a variety of mathematical tools. In particular, he develops the analytics for the Heston model and derives perturbative expansions for general stochastic volatility models. He also uses this expansion to analyze the properties of the Heston model

Chapter 11) I think this is one of the most comprehensive treatments of options with American and Bermudian exercise. The author shows how to solve the problem using PDE, integral equation and approximation methods.

Chapters 12-13) These two chapters provide an extremely useful technique for solving a number of complicated problems arising by pricing path-dependent options. The author develops one of the most useful techniques for solving pricing problems of exotic options (and which is completely missing from other quant books) - the augmentation principle that involves introduction of the auxiliary variable describing some functional of the process (for example, its average, maximum, crossing times etc) and augmentation of the pricing PDE with an additional dimension representing the evolution of this auxiliary variable. This augmentation technique is applied to solve a number of problems including pricing of barrier, asian, lookback, Parisian, passport options etc. Let me also note that passport options were originated from the Bankers Trust and the author played a leading role in developing analytics, which is very thoroughly introduced in the book, for these products. He also describes some departures from the log-normal model and shows how to apply alternative models, for example, Heston and CEV models for pricing path-dependent options.

Chapter 13 provides one of the most comprehensive in the existing quant literature analytics for path-dependent options. I strongly disagree with one of the reviewers that the author does not explain the Heston model and I point out that the book the reviewer is referring to does not include application of Heston model to pricing forward-start options and options on the asset realized variance. The pricing of European options under the Heston model is by now well documented (needless to say that the author was one of the first to introduce now widely used pricing formula involving one integral as opposed to the original formula including two integrals), however in practice the Heston model is most often applied for pricing volatility products (forward-starts and options on the realized asset variance) and the author does develop the necessary analytics to solve these problems, the part which is missing from existing texts.

Finally, Chapter 14 discusses some advanced topics - hedging under model parameter misspecifications, liquidity risks, and counterparty defaults.

What makes working on this book enjoyable and rewarding (I must note that it is not a book for after-lunch reading but for hard studying) is that never does the author leave important steps in his derivations omitting rather lengthy but trivial results "for the sake of brevity". Also all author's derivations and conclusions are self-consistent and no external references are made to derive or substantiate a proposition so that you are never stuck with a problem for which you have to consult other texts (the practice which is often abused in most of the quant finance texts).

To conclude, the author, who is one of the top Wall Street quants and applied mathematicians, does not give you a ready solution, discuss a "model calibration" and provide with "code examples", instead he teaches you how to apply the best suited techniques to solve specific problems and makes you participate in his discussion by filling the gaps. For graduate students I can tell that the experience and analytical stamina you get after working on this book are much more valuable in your professional career perspective than all that "light" stuff, including model calibration and implied volatility parametrization, which you will read from some other "quant" books - you will quickly pick that up once you have started your professional quant career.

I own pretty much all of the books on quantitative finance
and this one holds a cherished place on my bookshelf.
Anybody either working as a quant or with aspirations to become one should dust off some space on their bookshelf as well.
Anybody who does serious research in finance in either academia or industry already knows that it is somewhat rare for top researchers to pen books of any length. Time is at a premium and the payoff to publishing journal articles or to finishing off code is typically much greater than it is for writing books.

This is what distinguishes this book from its competitors.
The author is well known in financial circles as one of a handful of quants who is capable of meaningfully contributing new results to this fascinating field. The book contains many results which cannot be found elsewhere in the public domain.
Although the book title suggests that the results apply only to
foreign exchange, it is straightforward to adapt the results to

equities, commodities, and many other underlyings.

Wall Street is a very secretive place and it is not easy to get a glimpse of the kind of things that consume a quant's time.
I suspect that the only reason that this book was able to come to light is due to the acquisition of Banker's Trust, the author's former employer. Banker's was well known to be a fertile training ground for the best derivative minds and this book should prove to be a lasting legacy to that view.

The `ETF Strategist' is a book about using exchange traded funds as a way to more precisely allocate risk in investment portfolios. Koesterich lays out a framework for thinking about portfolios that is derived from quantitative finance (Chapter 3) - and demonstrates why the ETF is a more powerful innovation than you might at first think.

Each exchange traded fund can be thought of as its own particular strategy - offering `exposure' (beta) to a particular segment of the market. It is not that one particular ETF strategy is superior to all others -- for each strategy will have its own particular cycles and sensitivities to an ever-changing global economy. The more important point here is the connection made between the use of ETF's as an efficient tool to implement a more efficient (risk-adjusted) portfolio.

When constructing portfolios, investors need to think hard about the underlying larger risk factors their portfolio holdings represent. Historically, disproportional emphasis has been placed on security selection in order to `beat' a particular asset class (ie, the S&P 500). Investors would be well-served to focus their efforts on the more important issue of which market segments they would like to have exposure to given their view of the investment landscape -- and to de-emphasize security selection as an area of focus. Without a significant informational edge, security selection techniques will generally assume risk exposures that do not carry incremental returns - resulting in an inefficient portfolio.

An example from November of 2008 - an investor would have done well to expose their portfolio to the bond market during/after the credit market dislocation/opportunity. An ETF such as LQD offers pure, diverse and extremely low-cost exposure to the investment grade corporate segment of the bond market - a segment offering attractive spreads (value) and low risk. Compare this to selecting individual bonds -- where security selection without an `information edge' is only likely to produce incremental risk (issuer credit risk, liquidity risk etc...) without any corresponding benefit in expected returns. Even with a `perceived' significant informational edge, most professional bond (and equity) fund managers still fail with respect to generating true value-add.

The bottom-line is that using ultra low-cost tools such as ETF's to access attractive segments of the market (equity, bond, commodity, real estate) is a powerful concept in that you get instant access to the types of strategies that are the core drivers of portfolio performance without taking security-specific risk (risk that you are not being paid for anyway).

While the second half of the book is much like other ETF books - just the more typical overview of various ETF's - `The ETF Strategist' still does a good overall job of inspiring the reader to re-think their attitudes towards risk -- and a mental framework for balancing risk and return.

F Chris Greene, CFA

Well written and helpful on understanding what ETFs are and their benefits. The addition of a chapter that would give examples of portfolio construction using ETFs would have added punch and really earned the use of the word "Strategy" in the title.

The author's writing style is easy to read and just repetitive enough to allow concepts to sink in. The nuts and bolts of ETFs are very well covered. This includes how they are created, how they are "indexed", and how they may or may not adequately follow the index they are designed to follow. The author also covers costs of ETFs and tax consequences of ETF investments. ETFs of all varieties are covered from equities and fixed income to commodities and alternative investments. The author did not create a "do it this way" book but rather provided a very comprehensive foundation for understanding ETFs within the larger context of porfolio creation and management.
The author includes some other great pearls of wisdom in the first several chapters that are useful for any investor. This includes a well documented review of the elemental causes for unusually high returns on equity investment that have been experienced since the 1980s until recently. He also provides great insight on the ultra-competitive nature of the markets that individual investors face. This includes a great discussion of the types of risk and how to develop a healthy perspective on risk particularly relative to one's abilities as an investor.

Every individual investor should have this book!!!

This is an excellent book. Very intelligent and well written. It is NOT a how to do it book.

The first third of the book is totally about the theory of risk vs reward and about how beta can be used to estimate risk and volitility. He does an excellent job of explaining beta.

After that there is a long section on the legal structure of the business entities that offer ETFs.

Following this, about half the book describes a very short list of the available ETFs and describes the sectors to which they offer exposure. Note that "Offer exposure" is as close as it gets to a buy when /sell when / hold when recommendation.

If you are interested in the theory of constructing a portfolio and tweaking the risk relative to the market this book deserves five stars.

If you are looking for a book that tells you "If you expect energy stocks to go up buy XLE." This book rates zero stars.

The author performs a complete and delicate post-mortem of modern capitalist beliefs and misconceptions. I read Ayn Rand's "Capitalism: The Unknown Ideal" some time ago. Daniel Ben-Ami constructs a compelling argument in favour of unregulated markets, healthy competition and good old fashioned risk taking. Unlike Raynd he steers away from abstruse philosophical theories and sticks with what really matters to the reader: Real life examples, cataloging the myriad failiures of faux-capitalism. If like me you whince every time you hear about another ill-thought out but well intended goverment safeguard, you'll enjoy this book for the intellectual ammunition it delivers.

Let�s start out this review by stating up front that we disagree with Daniel Ben-Ami�s assertion that a preoccupation with risk measurement and management is a detriment to the global economy. With that out of the way, we can say that Ben-Ami presents a unique analysis of the modern global economy that is not at all without merit. His contention that lagging growth is a greater peril to the world�s economy than financial instability is reasonable and backed up by ample evidence and illustration. And his position that increased regulation could be doing more harm than good will be embraced by all free traders. On the basis of these discussions alone, we [...] recommend this book to anyone thinking seriously about international financial systems. But this book is perhaps most useful as a starting point for debate, which it will certainly generate in the mind of any informed reader. While you might quibble with Ben-Ami�s conclusions � as we do with his assertion that the threat of the 1990s financial crises was overblown � you will not be bored.

Usually, books on the dry subject of modern finance are a difficult read but this one is a welcome and worthy exception. The text is so fascinating that I managed to "make it" in three rather short sessions - and without the slightest trace of boredom in the process. I found no superfluous or pseudo-profound sentences and even the footnotes of this carefully researched study fully deserve the reader's attention.

Ben-Ami manages to explain in a few dozen pages the basics of apparently difficult concepts (as he rightly tells us, "even the most complex strategies tend to be built from simple components") such as derivatives, mutual funds, pension funds, hedging, etc. In the process, he shatters a lot of mistaken myths and conventional wisdom.

It is simply not true, he explains, that the instruments of modern finance are essentially speculative; on the contrary, they are usually a means for corporations and investors in general to better manage risk. Modern capitalists, unlike their predecessors of a more dynamic era, have an exaggerated aversion to risk and they try to build their portfolio in a way that minimises it. Thus a corporation dedicated to making cars, for instance, might prefer to invest part of its earnings in derivatives or hedge funds instead of innovating its production processes. The result would of course be a less dynamic form of capitalism, where more resources are spent on the financial markets - as opposed to the real, productive side of the economy. This, insists Ben-Ami, is in short what has been happening since the end of the post-war (1945-73) economic boom.

He offers powerful examples to illustrate his thesis. Yes, he says, it's true that George Soros made a billion dollars out of speculating against the British Pound in the early nineties - but that was only because the fundamentals of the British economy were really incompatible with the high value of its currency. A few years later Soros was betting on a fall of the Rouble and eventually lost two billion dollars. This time he had made a wrong analysis of the fundamentals of the Russian economy and got his fingers burned. The conclusion? Well, speculators really don't have the power to dominate events. So much for the idea that modern economies are but passive instruments at the hands of unscrupulous capitalistic sharks!

Ben-Ami regrets the general climate of fear for the future and horror of risk-taking that he thinks has taken hold of Western Europe and even more the USA in the last few decades - and has been, BTW, amply demonstrated in the recent near-hysteria caused by the appearance of a few cases of Anthrax in the US. He sees in this tendency a sign that the "animal spirits" that Keynes considered essential for the proper working of a dynamic capitalist economy are faltering.

The author doesn't present us a "solution" for this problem, probably because he's well aware of the fact that cultural attitudes are very hard to change. But he does warn that the climate of fear that currently permeates western society constitutes a clear impediment to stronger economic growth, both in the First and Third worlds. And he writes in such a clear, unpretentious style that one might just hope his analysis will eventually find a sympathetic hearing in the decision-making centers of Europe and the United States.

This is a decent enough book and will provide a good introduction to those who want to understand the basics of the foreign exchange market and, in particular, the details of financial instruments that can be used. To me, that is the problem though; the title alludes to managing risk, but this is really mostly (but not entirely) just yet another book explaining all the instruments that can be used. These are a dime a dozen and the reader would have been better served if the author focused on what the title promised. Still, if you are a corporate treasurer without much experience this book will be helpful.

Homaifar made complicated material more easy to understand. The examples provided help explain the subject matter thoroughly. Definitely a must-read!

Dr. Homaifar has done an outstanding job of presenting some very complex material in a clear, concise manner with excellent examples. I highly recommend this book to anyone interested or involved in finance and investing.

This book is currently out of print, so you will need to find it at a used book retailer or in your favorite library, perhaps. Regardless of how you get it, it is well worth the effort. It consists of 80 or so original short articles by the best investors and financial authors of all time--people like Paul Cabot, Benjamin Graham and David Dodd, Jesse Livermore, T. Rowe Price, John Burr Williams, David Babson, Peter Bernstein, Phil Fisher, G.M. Loeb, Harry Markowitz, Warren Buffett, Edward C. Johnson, William Sharpe, Arthur Zeikel, Barton Biggs, David Dreman, Charlie Ellis, Bennett Goodspeed, Roy Neuberger, John Train, Richard Brealey, John Templeton and Byron Wein. If there's a better collection of important investment writings, I don't know what it is. (There is a Classics II, however, which is a follow-on book to this one.) As they say on those television infomercials, it would take you forever and cost a small fortune to duplicate this collection of the most memorable writings of the finest minds in investing. In terms of what you'll get for what you pay, this book is simply a steal.

As the authors claim, this is a collection of the most enduring writings on investment theory and practice, and offers you invaluable insights from the industry's leading thinkers. I would have to agree that the 82 selected articles, chapters from books, and career observations by some of the best investors and financial authors, round out a mini-education in itself. Some of just a few of the authors selected are heavy weights like Benjamin Graham, Phil Fisher, Warren Buffett, Jesse Livermore, John Burr Williams, David Dreman, John Templeton and many many others. Topics as diverse from Buffett's 1965 letter to the partnership, to Jesse Livermore's "How to trade stocks" are spread throughout. The book is segregated into five (5) sections starting with the Pre-WW II section, then the 50's, 60's, 70's, and finishes with the 80's. (The book was originally published in 1989)

I am somewhat partial to Roy Neuberger's Almanac, Ben Graham's Chapter 20, and Phil Fisher's 15 Points, but there many others to comment on but let's just say this should be in everyone's collection that is a serious student of the market as the 700 plus pages are well worth the time invested. Of note: Since this is no longer published, one of the used book services will be needed.

This book tries to get at the heart of what causes bubbles. Schiller is honest that there is no one cause that can be purely attributed the to building of a financial bubble nor does he contend that the bursting of a bubble can be predictable. He uses examples from all the major stock market crashes from the past century. Part of focus is on the media and its influence on the generals public attitude towards various asset classes, mostly stocks and housing. Its a great reference to have if you think another bubble is on the verge of building as the book cites repeated themes that can be seen in the media that occurred in other bubble creation.

Great read. Won't get your rich (at least now) because we just missed one of the largest bubbles ever to be seen in housing. However, if humans are still running the world for the next 50 years be assured we'll have some more bubbles to come.

Great book based on the phrase spoken by Greenspan to try and slow down the economy.

not much food in the book overall..a very shallow and general talk, but i found it interesting to see his comments (p220) on the interest rate and other potential risks in the mortgage market back in 2005. some of the points he mentioned are indeed drivers of the recent subprime meltdown

Last year in my country you can see some commercials in the TV inviting to invest in Mutual Funds, and I believe lots of people turned to that. The problem is that the very next year, beginning in January, the housing bubble burst and we know the rest of the story. Although this book was written before that, the book remain valid at explaining the particular behavior of the markets in these moments of furor, the "irrational exuberance", and the panic that follows it. In my opinion the book is a good investigation of the markets, you can see the author analyzing all the factors involved, including sociological and psicological (this make the book a little slow). Is good to invest in the financial system, but in awareness of its possible behavior.

If you have Invested more than ten dollars in the share market or real estate than you should read this book.

Not a bad book, but it was written when the web was new. It's not about options as much as it's about where to trade them and how to open an account. If you're looking for an old how-to on getting an account setup and some basics of options, good book. If you're looking to compare BSM, Monte Carlo and Binomial methods, take a pass.

FRom your description this sounded like a very good book since I am interested in trading options. Lo and behold I find out this book was published in 1999 and in 8 years lots of new things have been developed. You should have mentioned in your promo that this book was written 8 yrs. ago. I got ripped off. Just be honest with your descriptons. Les Lerner

This text contains a lot of information on online trading in general and trading of options in particular. But be careful, you need to know more than that to succeed in this business. Although this book will tell you how to go about placing your orders and which option strategy is good for which situation, making money comes down to predicting the behavior of your stock price and volatility, something you will have to learn elsewhere. Incidentally the book was most likely written to increase subscriber base of the author's website, so don't let your guard down.

First 8 chapters give you a very superficial introduction to the options trading and some strategies. Let me repeat - very superficial. If you want to learn that matter, you definetely need another book.

So, I was trying to get usefull info on the WEB resources. Let me tell you - two years make a big difference in the Internet world. Many sites do not exist. Some of them have nothing in common with the description, which you find in a book. Chapter 9 - "cybervesting from A to Z" is a complete waste of time and is full of frustration. It guides you through interfaces of nonexisting web pages. The pages, which, according to th author, answer the crutial questions of a trade. I lost most of time just to verify nonexistence of the referenced resources.

I won't pretend to be an expert option trader. I'm in my third year of seeking a bachelor's, and the degree will not be very finance or investing related. This is the first book I read about options, and it successfully heightened my interest by introducing me to some basic option strategies. Another success of the book is the advice it gives on how to initiate and monitor trades throughout the trading day.

Unfortunately, the only people with time to check these complex positions each and every minute are multi-million dollar hedge fund managers (such as the author). The rest of working class America and I can only check our investments on occasional evenings. My guess is the average reader does not have the time or the stomach to sit on pins and needles every day wondering if it's time to exit their risky positions. The only advice the author lends about early exits from trades is that if the stock looks poised to move against you then get out.

Also, the author tells us to start looking for trades based on increased media coverage, high volume, and/or price volatility. This sort of herd following mentality is what I think leads to the massive market swings which cable commentators and industry insiders pretend to understand but incorrectly predict on a daily basis. If the author could truly capture these wild swings, writing this book would not be necessary.

Even the author's own website (after buying expensive extra services) does not search through all optionable stocks to find volatility skews that would make the pie in the sky trades illustrated throughout the book possible. The "platinum" site lets you pick a stock and then see what you can do with it. The odds of randomly finding a stock where you can risk less than $75 and possibly gain over $400 with a 15 point spread of profitability (chapter 8, long condor), are close to a needle in a hay stack.

Applicable advice to average investors is something this book truly lacks. Modifying simple stock ownership with options is not discussed. All of the option strategies included contain absolutely no stock positions (long or short). Trading within IRA's was important before the maximum contributions started being increased, but now they will become more important than ever. I suspect the rankings of brokers in the book and on the author's website are based more on advertising compensation than usefulness to individual traders. The rankings refuse to recognize the lowest-commission-charging online brokerages, and left out completely is the issue of assignment and exercise fees. Assignment and exercise fees can range from 15 to 30 dollars - per contract ... emphasis on per contract. I chose my current broker (not on any ranking list) only because they do not charge those fees.

In a final derogatory note, the seventh chapter contains text that contradicts itself when explaining the ratio call spread and the call ratio backspread. I had to reread the chapter a few times to sort out where the errors are, and what those positions entail.

Again, the book did shed light on an area of investing I knew little about, and intrigued me enough to want to learn more. Yet by sporting a sexy neon cover and depicting life from the point of view of someone managing millions, this book and others like it will probably keep average people thinking of options as risky, scary, and strange. Other than giving me a basic understanding of some common ways to trade, all this book really accomplished was motivating me to write a better one.