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Option Trader's Hedge Fund, The: A Business Framework for Trading Equity and Index Options, CourseSmart eTextbook

By Dennis A. Chen, Mark Sebastian

Published by FT Press

Published Date: May 10, 2012

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In this book, a hedge fund manager and an option trading coach show you how to earn steady, reliable option income trading options by managing your trades and running your option portfolio as a real business following the fundamental principles of an "insurance company". Mark Sebastian (, and hedge fund manager Dennis Chen (Smart Income Partners, Ltd.) explain why this particular business model offers such an attractive practical model for individual traders, and teaches the specific "how to"s you need to create and operate your personal option income portfolio this way. Sebastian and Chen begin by introducing their exclusive business model framework, identifying the option concepts most critical to long-term trading success, and presenting core income strategies based on selling rather than purchasing options. Next, they walk you through setting up your "business," offering a complete "operations manual" addressing each practical issue you'll face. The authors teach key lessons they've learned from their own experience -- including how to maintain trading discipline, manage volatility and risk, account for the "other" Greeks, and handle payments. Packed with real-world examples, this book reveals how professional money managers and hedge funds really manage their option trading operations -- and guides you step-by-step through setting up your portfolio and running your trades to earn the same high levels of income.

Table of Contents

Introduction    1
Part I: The Framework
Chapter 1: The Insurance Business     5
Chapter 2: Trade Selection     19
Chapter 3: Risk Management     31
Chapter 4: Trade Execution     43
Chapter 5: The Trading Plan     55
Chapter 6: Trading Infrastructure     63
Chapter 7: Learning Processes     73
Part II: Implementing the Business
Chapter 8: Understanding Volatility     81
Chapter 9: Most Used Strategies     89
Chapter 10: Operating the Business: Putting Together TOMIC 1.0 from A to Z     121
Part III: Lessons from the Trading Floor
Chapter 11: Lessons from the Trading Floor on Volatility     131
Chapter 12: Lessons from the Trading Floor on Risk Management     145
Chapter 13: Lessons from the Trading Floor on Trading and Execution     155
Chapter 14: Lessons from the Trading Floor on the Other Greeks     173
Chapter 15: The Beginning     191
Appendix A: Recommended Reading     195
Appendix B: Strategy Learning Sequence     199
Appendix C:     201
Appendix D: Kite Spread     203
Index     205

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Option Trader's Hedge Fund, The: A Business Framework for Trading Equity and Index Options, CourseSmart eTextbook
Format: Safari Book

$24.99 | ISBN-13: 978-0-13-282347-0