This is the Safari online edition of the printed book.

“Unlike most books that oversimplify trading situations, Augen’s approach forces you to learn by solving real-world problems where stock prices spike up and down and volatility changes constantly. Learning by doing is a distinct advantage for both novice and expert.”

--Sean Sztern, Alternative Strategies Group, Desjardins Securities

“This workbook represents a unique and effective learning tool. It will broaden your understanding of options and raise your trading skills to a higher level.”

--Dr. W. Edward Olmstead, Northwestern University, author of Options for the Beginner and Beyond

“Serious options trading requires skills that can only be learned through practice. Augen’s progressively more challenging problems definitely provide that real-world practice. There are lessons here for everyone, from beginner to sophisticated professional.”

--James Marcus, Partner, CMG Holdings, LLC

Most options books offer theory and strategies but don’t give you what you really need: hands-on practice that prepares you for real-world trading, where subtle decisions make the difference between winning and losing. Now, there’s a solution: The Option Trader’s Workbook.

Using a question and answer format, this innovative workbook covers key scenarios you’ll encounter as an option trader. Expert trader Jeff Augen explains the challenges they present, reveals the potential pitfalls, and walks you through each example to help you understand how to maximize your success. You’ll master trades designed to profit from rising or falling stock prices, rising or falling volatility, time decay, rapid price spikes, and many other market dynamics. Each section helps you build your skills one trade at a time---whether you’re new to options or you’ve been trading for years.

• Learn by doing--not by reading or memorizing
  Practice real decision-making in real trading situations

• Gain a detailed, intuitive understanding of pricing
  Understand exactly what must happen for your trade to be profitable

• Learn to identify efficient trade structures
  Avoid errors that cause losses even when you’ve correctly predicted a stock’s direction

• Learn how to manage risk effectively
  Optimize profits by choosing the right option strategy for a particular situation

• Use complex trading strategies with confidence
  Master highly profitable techniques used by professionals

Amazon.com® Reader Reviews (Ranked by Helpfulness)

Average Amazon.com® Rating:  Based on 8 Ratings

Not understandable - 2009-04-20
Reviewer Rating:
Sorry, I had high expectations, but am putting this book aside. I've been working on it for 3 days, and know nothing more than when I started. It says it goes from easy to more difficult problems, but does not. It starts out hard and jumps around. Also there is no coherent learning structure or organization, and the answers are not understandable (unless perhaps one already knows the material).

The best options workbook I've read to date - 2009-03-11
Reviewer Rating:
I have read most well-recommended books on options and derivatives (save Hull...) and most of all "workbook"-type options books to boot - and this is the first I've come across that actually sets up problems and takes you through the solutions. Where most other workbooks re-hash your standard strategies and place them in the appropriate setting, along the lines of "if your market outlook is bullish, do bull call or put spreads...", Augen actually hands out the tools to do not only risk-reward calculations, but probability calculations, adjustments and much more.
I've been theoretically applying the lessons learned in the Volatility Edge for the past year (with varying success - since you really can't tell until you bet...) and is really pleased to have found this most excellent book before my losses got too out of hand...
My only issue is that I could have wished for a little more in-depth description of how the parameters for calendar spreads are calculated, i.e. upper and lower breakevens. On the other hand, no other workbook has ever provided ANY insight whatsoever on the calculations that goes into the analysis of calendars!
Definitely recommended, PROVIDED that you have a decent grasp of basic options theory, i.e. pricing, greeks etc.

Good book...but - 2009-05-16
Reviewer Rating:
okay - I'm starting to understand this book - unfortunately this is the first book on options I've read. (that's a good and bad thing). While the book is sooo thorough, a trait to be admired, more commentary and explanation would be helpful rather than constant question and answer. As far as thoroughness is concerned I have a few pet peeves
- when explaining what a variable is, like delta, give units of measure and what you expect to find it at, when it's high, when it's low, etc. the book does it in a fairly roundabout way - when looking for a quick answer I had to read a whole chapter.
- big one - when researching butterflies I realized there are situations when you CANNOT make money. It would be nice if the book showed you how to differentiate those from those where you can.

All in all this is an amazing book - and I NEVER give 5 stars to anyone.

Good 2nd book on options - 2009-10-14
Reviewer Rating:
This is not a book for learning the basics of options and option strategies. If you are starting from the beginning, buy McMillan's "Options as a Strategic Investment", which is thick, but easy to understand. This book is basically option word problems with answers - and usually they aren't easy questions.

not so great - 2009-10-10
Reviewer Rating:
disappointing. first half is like an option trivia book, some amusing facts and graphs, second half is just weird. I was particularly looking for insight into synthetic positions and the nuts and bolts of put-call parity, and found just confusing stuff. One specific question asks "why are atm calls priced higher than atm puts? He gives the answer it is because of a lognormal distribution of underlying prices to the upside, which may in an extremely abstract way be true, but ignores the down to earth fact it is because of cost of carry in relation to the synthetic hedge. So the first half has amusing trivia, and the last ten pages some usefull info on calendar spread valuations. The rest is sort of a waste. Worth the price, but no " Sheldon Natenberg"

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