Option

If you are a beginner or an experienced SQL developer this is the book for you. Full of had to find details and tips

I am a graduate who majored in finance working as a financial analyst. Well, what I should say of this book is that it tells you how the mechanism works in the whole derivatives world in terms of trading and pricing in a comprehensive manner. As a corporate finance and banking finance expert who has recently got interest in the field of derivative securities this book turns out to be a good starting point in understanding derivatives. However, if you want to know more about in this field, you should also spend time on other textbooks and read academic papers. Furthermore, one had better take some empirical exercises especially on derivative pricing by using computer programmes. (A good comprehensive and easy to follow text is Simon Benninga's Financial Modelling with Excel) Also a good statistical and econometric background would be helpful in understanding derivatives. What I find as a shortcoming in this book is that it doesn't provide answers to the end of chapter questions nor does it supply a computer aid material (a disk whatever) even though it is mentioned in the book.

This guide provides an extremely clear introduction to derivatives, including futures, options and swaps. The book's heavy use of charts and other graphics, and friendly layout, makes it especially easy to follow. Though it provides only basic information about strategy and pricing, it does clearly outline the risk profiles of several common derivatives trades. This book won't help you master the Black-Scholes option pricing formula, but it will give you a solid understanding of how derivatives work. Overall, a very good introduction.

Good review of options and futures trading. Each section is just 2-3 (short) pages, usually with an example or two, which makes the book very easy to pick up and read a little at a time. Since each section is so short, it also serves as a useful quick reference.

For more detailed reading on options/futures trading, I'd suggest finding another book. Use this mainly for quick reference, or as a refresher.

This book is a good general overview of options pricing for those who do not have a strong mathematical background. It emphasizes the practical aspects of the subject and the author endeavors to be as concrete as possible. There is accompanying software with the book, but since I have written my own software for options pricing I did not use it and cannot attest to its utility or reliability.

The first chapter defines the call and put option, and gives a short history of the options markets. The author discusses taxation of option transactions briefly, which is not usually found in books on options.

In chapter 2, the author discusses options payoffs from using various options strategies. The important principle of arbitrage is discussed, and the assumption of no transaction costs is made throughout the chapter. The author gives a good example of how small differences in price can persist in actual markets, thus showing how transaction costs can effect option pricing. Option combinations, such as straddles, strangles, bull, bear, box, butterfly, spreads, and condors. All of these are summarized nicely in table form. The important area of portfolio insurance is treated with brief discussions on mimicking portfolios and synthetic instruments. Helpful references are given that study the cost of portfolio insurance.

In chapter 3, the author considers the factors that contribute to the pricing of an option using the principle of arbitrage. Complete financial markets are assumed, and the goal is to find how these assumptions can be used to put bounds on option prices. The chapter could be viewed as an elementary exercise in the mathematical formalism of optimization with constraints, but the arguments are mostly qualitative. The effect of interest rates on option prices is also considered in this chapter. Here, the principle of arbitrage is employed to show the price of a put must fall as interest rates rise, while call option prices increase with higher interest rates. Also, the author begins an attempt to show how stock prices influence option prices, and he shows that the riskier the underlying stock, the greater the value of an option.

Then in chapter 4, the author takes up issues of a more mathematical nature, wherein he uses the single-period and multi-period binomial models to price European options. These are used to derive the famous Black-Scholes option pricing model. The author's approach is very practical as he discusses various methods of using historical data to estimate the stock's standard deviation. He cites the Crash of 1987 as an example of why one should use current data to estimate the volatility. This motivates the development of other techniques, such as implied volatility, for estimating the standard deviation.

The 'Greeks', called option sensitivity measures by the author, are discussed in chapter 5. He does use partial differential calculus, but motivates it well, so readers without the mathematical preparation can follow the presentation. It is shown how to combine options with the underlying stock or into portfolios, one can construct positions with the desired risk exposure.

The more difficult job of pricing American options is dealt with in chapter 6, the Black pseudo-American call option pricing model being treated first. The binomial model is applied to American options with various kinds of dividends.

In chapter 7, the author considers options on stock indices, foreign currency, and futures. The Merton model leads off the discussion, and both European and American options are treated in the chapter.

Then in chapter 8, the techniques developed in the book are applied to corporate securities. It is an interesting discussion, and the author gives straightforward examples to illustrate various corporate financing strategies. It should prepare the reader for more advanced reading on the subject.

The last chapter is the most interesting of all as it deals with exotic options. The author considers nine types of exotic options, namely forward-start, compound, chooser, barrier, binary, loopback, average price, exchange, and rainbow options, all of these studied as European options. Closed-form solutions for these types of options are given and numerical examples are given. Several helpful references are given at the end of the chapter. The author gives an interesting real-world example of the use of chooser options, namely the case of hedging with a chooser option on the Mexican peso before the NAFTA agreement in 1993.

Tompkins covers some relatively advanced topics in options, such as volatility forecasting and interest rate options, in an understandable manner. He uses only enough mathematics to make the important points. I think this book would be useful to a trader. Unfortunately, Tompkins has a verbose writing style and has not mastered punctuation.

This book provides a simple introduction to options pricing for readers with moderate technical skills. A basic background in statistics and calculus are all that is needed to get through the book. The ratio of text to equations is much higher than in most derivative texts. I find the intuitive explanations to be excellent. Another nice feature is a systematic explanation of different option types, i.e. stock options, interest rate options, options on futures etc.

If I ever taught an undergraduate course on options pricing I would probably use this as the text.

Overall this book offers an excellent introduction to options pricing. Very readable.

Not everyone who has stock options is a dot com millionaire. This is a practical guide to stock options for all levels of employees. The author helps decipher the rules of stock plans that are usually unintelligible.

Dr. Kilbride's well-researched analysis of the practice of plural marriage is an important step toward rethinking our outlook on how people are "supposed to" relate. His extensive background in polygamy as it is practiced in African cultures is both an asset and a liability, unfortunately. By focussing too greatly on the African experience, he lessens the value of his work to Western readers. His personal ambivalence shows through at times, too, especially in the mildness of his "advocacy" near the end. Still, he looks at this "taboo" approach to relating from the sociological, biological, and ethical/religious views, and helps knock down some of the preconceived notions about the "preeminence" of monogamy.

Despite Dr. Kilbride's "circumspection" in his recommendations, this book is well worth reading for both the academic and general public with an interest in alternatives to conventional monogamy in response to the dramatically changed social, political, and economic circumstances of the 21st century.

I enjoyed Pregnant Too Soon: Adoption is an option because it came from the mothers themselves. Even though the book was about your option to choose adoption it wasn't 'coloring' your mind to just adoption. It spoke openly about the three options newly pregnant women face (keep, abort, adopt). Very touching stories from the mothers. Very insightful and helpful.