Average Reviews:
(More customer reviews)This book fails on so many fronts that space simply wont allow to cover everything. First off, the author commits the crime of not knowing his audience. He assumes that you know nothing about options and very little about math. He then proceeds to bore you in early chapters with math that isn't even required later on. What's the point!? Its not until you get half way through the book that you finally get into the real meat. By then, he's makes a huge leap from reviewing how you add 1 + 1 to suddenly assuming that you know 1st year college calculus all in the matter of 1 chapter. In short, he tries to appeal to all, but misses the mark. I am an engineer, I know math, thats why picked up this book!!
Technically, I have many issues. First off, he more or less states that when selling naked puts you shouldn't worry about a move greater than 4 standard deviations because they never happen. Well my friend, although moves such as these do not occur frequently, they do occur often enough that I'd be concerned about using such a stratedgy. I have real life data from the past year to back up my claims. All the author has is theory. Go ask anyone holding a naked put in a pharmacutical company that just got shot down by the FDA what they think of a 4 SD move. They happen.
The author then states throughout the book that these are his claims for how the methods that he presents should work, but he then goes on to say that they should be tested before committing any real money. What the heck!? Why publish a book only to say that you should do your own research to prove his methods!?
I've been waiting for such a book for years! All the other options books out there miss the point of expected value. This book shines on that front. What's the point of winning 90% of your trades if you're a loser at the end of the day. That's the power of expected value. For years I've thought that if I could only come up with a way to accurately calculate expected values on options, then I could turn wall street into my own little casino and retire early! Well, its not that easy!
I've been doing my own research for the past year on all the formulas presented in this book. I've analyzed 1,000's of positions every month on spread sheets with easily downloadable data. Word of warning, dont bet your house on the expected values holding up. Distributions of returns vary from month to month and they also vary depending on the length of time involved. These distribution profiles vary enough to screw up expected values. Distribution profiles also vary greatly depending if you're looking at a large cap or micro cap stock. Do your own research as the author warns and you'll see for yourself. Its been a very frustrating process because in theory the math should work and I should be rich by now, but in practice it doesn't work so well. It just speaks volumes to how difficult it is to make money long term trading options.
I haven't given up the chase yet as I am continuing on with my research, testing and tweaking. This book should be credited for pushing me in the right direction, but its disappointing that the book falls short on its own real world exhaustive research.
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