Table of Contents

Preface ix

Acknowledgments xvii

Part One The Basics

Chapter 1 The Basics 3

Chapter 2 Direction, Magnitude, and Time 17

Chapter 3 Volatility 25

Chapter 4 Option Pricing Models and Implied Volatility 37

Part Two The Phenomena

Chapter 5 The Volatility Risk Premium 51

Chapter 6 Implied Volatility and Skew 63

Chapter 7 Time Value and Decay 77

Chapter 8 The Bid/Ask Spread 87

Chapter 9 Volatility Slope 105

Part Three The Trades

Chapter 10 Covered Calls 115

Chapter 11 Selling Puts 151

Chapter 12 Calendar Spreads 171

Chapter 13 Risk Reversal 197

Chapter 14 Vertical Spreads 217

Appendix 235

Index 243

About the Author

SCOTT NATIONS is President and CIO of NationsShares, a division of Fortress Trading, Inc. Previously, he was head trader for Sovereign Capital, a proprietary trading firm, and a floor trader at both the Chicago Board of Trade and the Chicago Mercantile Exchange. Nations is also a financial engineer, creating, testing, patenting, and licensing a number of sophisticated option-based and option-enhanced products including the Nations Enhanced Covered Call Index; the Nations Enhanced Collar Index; the Nations Option Levered Index; and the Nations VolDex. He appears on CNBC several times each week and serves as one of the regular panelists on CNBC's weekly Options Action show.

Reviews

"Options Math for Traders + Website: How to Pick the Best Option Strategies for Your Market Outlook by Scott Nations is an excellent educational tool for the investor wishing to utilize options in their investment strategies. Options Math for Traders guides you and helps you understand the thought process when evaluating and analyzing risk and reward on an options trade". -- Dax Rodriguez , President, Livevol, Inc.