Trading Index Options

Rating:
Summary: A Clearly Written Look At Index Options
Review: A few years back, Bittman wrote a well-received fundamental look at equity options entitled Options for the Stock Investor. This time around the author delves into the world of index options.

Trading Index Options covers a lot of material and shines at helping the trader build a foundation to expand upon. This strength is clearly evident early on when Bittman defines most common option strategies. From the simple to the complex, each page has a graph illustrating profit and loss characteristics at expiration along with some insightful comments on each strategy. To the author's credit he mentions transaction costs as a major factor hindering more complicated strategies.

In ensuing chapters Bittman covers basic buys and sells in detail, along with basic spreads, straddles, strangles, and ratio spreads. The book is light on math and seeks to make these strategies and the reasons for their employ easily understandable.

Included with Trading Index Options is a software program entitled Op-Eval 3. The program can be used to calculate implied volatilities, greeks, compare options, and graph positions. Perhaps of greatest utility, however, is the software's ability to allow you to look at how changes in underlying prices and time decay will affect your position.

While advanced option players may find they've already compiled much of the information Bittman presents, it remains a solid sourcebook. Beginners and intermediate players will be hard pressed to find a clearer or more concise reference tool. Easily worth the money you'll pay online and a nice addition to anyone's option library.

Rating:
Summary: Trading Index Options
Review: I found the software extremely helpful and working properly. The book, while discussing indexes, speaks to all equity and index options. I made the costly mistake of paying for the Windows version of Option Master Software through the z-shops and could kick myself daily for that error.

The software that comes with the book is basic Black & Sholes calculations but unlike Option Master, it offers comparative capabilities and graphing and costs 60%-80% less depending on whether you're a windows or mac user

While the text is basic, it is encyclopedic compared with the Option Master's redundant and pitiful effort. Unfortunately, Bittman's book should come with some technical support or a supporting website. But all in all, this is a pretty good primer.

Rating:
Summary: For All Options Traders
Review: I trade options, and know that any options trader will benefit from this book. There are many parallels across markets, and this book delves into an area that isn't written about in detail anywhere else, and does a good job of illustrating the nuances of index options.

I also recommend "Credit Derivatives" by Tavakoli, for more about structuring index options in note form. Tavakoli also explains credit default options in detail.

Rating:
Summary: Good Book with Outdated Software
Review: I was eager to use the software that came with this book, but since my PC runs on Windows 98, it will not install. They should update the software so it will run on later versions of Windows before they sell the book again, or least ask you what version of Windows you are using before you place the order.

Rating:
Summary: McGraw-Hill gets a ZERO for Customer Service
Review: McGraw-Hill failed to honor their commitment to provide a replacement to the enclosed defective software. A follow up letter to their Chief Executive Officer failed to provide even an acknowledgement of my request. The book, which is marginally acceptable with the software, is virtually useless without the software.

Rating:
Summary: Good Book with Outdated Software
Review: The good news is that this book is very nicely done, providing a useful foundation to beginner and intermediate options traders. I found that I learned quite a lot about the interactions between option pricing and the various factors influencing pricing. The author provides numerous case study examples utilizing the OP-EVAL(TM) software included with the book. A majority of the book contains detailed examples describing how to use the software and interpret the output. The bad news is that the software will not run on current Windows operating systems (Windows 98 or newer). So don't buy the book if you want to try the software on your own. Efforts to contact the author, through the publisher McGraw-Hill, about the possibility of updating the software, have been unsuccessful. Otherwise a good book.

Rating:
Summary: SAVE YOUR MONEY!
Review: The software is defective and the author and publisher, in the unlikely event you can get either to respond, only cloud the issue with disingenuous assurances.

Rating:
Summary: McGraw-Hill did not honor their defective-software warranty
Review: The Warranty statement requests defective diskettes be sent to their Blacklick, OH Customer Service department. It's been nearly two months since I complied with this request and thus far have not had the courtesy of an acknowledgement, much less a replacement as promised. Shame on McGraw-Hill. I begrudge them the one star needed to implement this review.

Rating:
Summary: An understanding of options delivered accurately and clearly
Review: This book demystifies the factors that make options such an attractive and powerful trading and investment tool. Bittman's clarity leaves no misunderstanding or ambiguity about how things work in plain language and steers you clear of common beginners' mistakes. The included software provides a hands-on interactive learning experience to reinforce ideas introduced in the book and is a useful tool to evaluate potential trades.

The sections that lay out trading plans and strategies present a straightforward and disciplined approach to identifying and evaluating attractive trading opportunities. Although geared to options, these are helpful to consider no matter what markets or instruments one is trading.

Read Bittman first to get a solid foundation, then move on to the MacMillan books for the post-grad experience.

An excellent value for the price!