Volatility: Practical Options Theory (Wiley Finance) - Hardcover

Iqbal, Adam S.

Hardcover

ISBN 10: 111950161X ISBN 13: 9781119501619

Publisher: Wiley, 2018

Synopsis

Gain a deep, intuitive and technical understanding of practical options theory

The main challenges in successful options trading are conceptual, not mathematical.  Volatility: Practical Options Theory provides financial professionals, academics, students and others with an intuitive as well as technical understanding of both the basic and advanced ideas in options theory to a level that facilitates practical options trading.  The approach taken in this book will prove particularly valuable to options traders and other practitioners tasked with making pricing and risk management decisions in an environment where time constraints mean that simplicity and intuition are of greater value than mathematical formalism.

The most important areas of options theory, namely implied volatility, delta hedging, time value and the so-called options greeks are explored based on intuitive economic arguments alone before turning to formal models such as the seminal Black-Scholes-Merton model.  The reader will understand how the model free approach and mathematical models are related to each other, their underlying theoretical assumptions and their implications to level that facilitates practical implementation.

There are several excellent mathematical descriptions of options theory, but few focus on a translational approach to convert the theory into practice. This book emphasizes the translational aspect, while first building an intuitive, technical understanding that allows market makers, portfolio managers, investment managers, risk managers, and other traders to work more effectively within―and beyond―the bounds of everyday practice.

• Gain a deeper understanding of the assumptions underlying options theory
• Translate theoretical ideas into practice
• Develop a more accurate intuition for better time-constrained decision making

This book allows its readers to gain more than a superficial understanding of the mechanisms at work in options markets. Volatility gives its readers the edge by providing a true bedrock foundation upon which practical knowledge becomes stronger.

About this title

About the Author

ADAM S. IQBAL is a Managing Director and Global Head of FX Exotics and Correlation at Goldman Sachs, where he has also served as EMEA Head of G10 FX Options Trading. He has worked as an FX Volatility Portfolio Manager at Pimco, and as an FX options trader at Barclays Investment Bank. He holds a PhD in financial mathematics and financial economics from Imperial College London, an MSc in applied mathematics from Oxford University and an MSci and BA in theoretical physics from Cambridge University.

From the Back Cover

Volatility: Practical Options Theory dissects options the financial contracts that provide exposure to volatility risk to help readers marry foundational knowledge with practical application. While textbook treatments of the mathematical theory of options are abundant, this book is unique in its emphasis on developing an intuitive understanding of both the basic and advanced ideas in options theory.

The discussion examines options theory concepts both with and without mathematical models, and then further develops this approach with insightful guidance on merging the two perspectives to serve practical implementation. This translational approach may prove particularly valuable to options traders and other practitioners tasked with making pricing or risk management decisions in an environment where time constraints mean that simplicity and intuition is of more value than mathematical formalism.

• Develop a deeper understanding of option greeks, delta hedging, implied volatility, and other major concepts based on intuitive economic arguments before applying a mathe matical model.
• Translate theoretical ideas into practice.
• Delve into the Black-Scholes-Merton model and its underlying theoretical assumptions and their implications in a way that facilitates real-world implementation.
• Refresh calculus and advanced statistical skills using helpful appendices that provide important formulae and functions.

Author Adam S. Iqbal argues that option trading's main challenges are conceptual rather than mathematical; by tackling these challenges head-on and providing a clear link between theoretical and practical, this book offers traders, portfolio managers, investment managers, risk managers, and other market practitioners an invaluable source of insight designed to facilitate more effective volatility strategy. Comprehensive in scope and depth, Volatility: Practical Options Theory provides a much-needed reference for practitioners seeking a more effective grasp of options and volatility.

From the Inside Flap

Volatility: Practical Options Theory dissects options—the financial contracts that provide exposure to volatility risk—to help readers marry foundational knowledge with practical application. While textbook treatments of the mathematical theory of options are abundant, this book is unique in its emphasis on developing an intuitive understanding of both the basic and advanced ideas in options theory.

The discussion examines options theory concepts both with and without mathematical models, and then further develops this approach with insightful guidance on merging the two perspectives to serve practical implementation. This translational approach may prove particularly valuable to options traders and other practitioners tasked with making pricing or risk management decisions in an environment where time constraints mean that simplicity and intuition is of more value than mathematical formalism.

• Develop a deeper understanding of option greeks, delta hedging, implied volatility, and other major concepts based on intuitive economic arguments before applying a mathe matical model.
• Translate theoretical ideas into practice.
• Delve into the Black-Scholes-Merton model and its underlying theoretical assumptions—and their implications—in a way that facilitates real-world implementation.
• Refresh calculus and advanced statistical skills using helpful appendices that provide important formulae and functions.

Author Adam S. Iqbal argues that option trading's main challenges are conceptual rather than mathematical; by tackling these challenges head-on and providing a clear link between theoretical and practical, this book offers traders, portfolio managers, investment managers, risk managers, and other market practitioners an invaluable source of insight designed to facilitate more effective volatility strategy. Comprehensive in scope and depth, Volatility: Practical Options Theory provides a much-needed reference for practitioners seeking a more effective grasp of options and volatility.

Edition details

• Publisher: Wiley
• Publication date: 2018
• ISBN 10: 111950161X
• ISBN 13: 9781119501619
• Binding: Hardcover
• Language: English
• Edition number: 1
• Number of pages: 208